Putin hails Alrosa as production begins at new Russian diamond field
Alrosa, which is already the largest producer of rough diamonds in carat terms, competes with Anglo American’s De Beers, the biggest seller of rough diamonds by value
Russia’s Alrosa says it has begun production at its new Verkhne-Munskoye diamond field in eastern Siberia, which President Vladimir Putin says will reinforce the state-controlled firm’s position as a world leader.
Alrosa, which is already the largest producer of rough diamonds in carat terms, competes with Anglo American’s De Beers, the biggest seller of rough diamonds by value. Together, they produce half of the world’s rough diamonds.
“The launch of this field will certainly reinforce the positions of Alrosa... as an international leader. It currently accounts for 27% of global diamond production," Putin, who took part in the start-up ceremony via video link, said.
The new deposit will partially replace suspended output at Alrosa’s underground Mir mine, which was flooded when water seeped in from an open-pit mine above it in 2017.
“Thanks in no small part to this project, Alrosa will be able to increase its production next year,” Sergey Ivanov, Alrosa CE, said.
Alrosa has previously said that its 2019 production would be around 37.5-million to 38-million carats, compared to 36.6-million carats in 2018.
With reserves enough to continue mining operations until 2042, the new field will be mining about 1.8-million carats of diamonds a year for one of Alrosa’s existing processing plants located 170km away from the field.
Mir was producing 3.2-million carats of diamonds a year, about 9% of Alrosa's total output, until the accident.
Alrosa added that it had spent 16-billion roubles ($244m) to prepare the field for the mining operations in the last three years.
The new field will add around $50m to Alrosa's earnings before interest, taxation, depreciation and amortisation in 2019, analysts at BCS Global Markets said in a note.