In the face of escalating sanctions, Russia’s Ministry of Finance has inked an agreement with Alrosa, the diamond mining giant, to procure a portion of this year’s rough diamond production, reports reveal.
Sources close to the matter disclosed to Interfax news agency on Wednesday that in March, Gokhran, the state repository for precious metals and gems, executed its initial purchase of rough diamonds from Alrosa, encompassing the entirety of the miner’s production cut for the period. Additionally, the sources confirmed an ongoing arrangement where Gokhran will continue to acquire rough diamonds from Alrosa throughout the year.
Although the exact quantity Gokhran intends to procure remains undisclosed, industry analysts speculate it to surpass previous procurements, which ranged from $100 million to $200 million during periods of sluggish demand, notably amid the 2009 economic crisis. In 2020, discussions between Alrosa and the precious metals and gems repository hinted at a potential $1.7 billion deal. However, Interfax notes that the 2024 budget cap for precious metals and stones acquisition limits Gokhran’s purchases to RUB 51.5 billion ($558.1 million).
The move comes against the backdrop of heightened sanctions imposed by the US, the UK, and the European Union on Russian rough diamonds earlier this month, with further restrictions slated to take effect in September after an initial “sunrise period.”
