Russian jewelry giant Alrosa has just announced its plans to increase jewelry production over the 2010-2012 period to produce 102.3 million carats in rough diamonds. Known as Russia’s largest diamond company, and practically a monopoly, Alrosa is heavily engaged in all aspects of the diamond process, including exploration, mining, manufacture and sale. The Alrosa behemoth actually accounts for nearly 25% of the world’s rough diamonds supply and nearly 97% of the Russian supply, according to the New York Times.
Alrosa’s plan for the next three years will be presented for approval at the annual conference set to take place in June. The company plans to produce 34 million carats at $3.18 billion average production. Of course, sales dropped in 2009 to 32.8 million carats during the global financial crisis, with sales dropping further to $2.19 billion. The year before wasn’t quite so bad with sales totaling $2.93 billion.
Alrosa to Increase Diamond Production
Russia Now World’s Largest Diamond Producer
Russia is quickly surpassing De Beers as the world’s largest diamond producer. And yet this feat hasn’t been translating into extensive sales as Russia has been stockpiling the gems during the global economic crisis. The Alrosa diamond company, which is 90 percent owned by the Russian government, hasn’t sold any of their rough stones since December. And so Russia has, in a way, become the decisive force in the pricing of diamonds on the global scale. What it decides in terms of production, diamond distribution, and pricing will largely determine the value of diamond rings, earring, tennis bracelets and jewelry for several years.
As Alrosa replaces De Beers as the world’s largest diamond producer, many believe that it is a precarious moment for the Russian company to assume leadership of the diamond industry.
But since de Beers has agreed to an European Union antitrust agreement from stockpiling and has closed mines as a result of a massive increase in rough stones, Alrosa, and Russia along with it, has emerged as the diamond industry leader.
Alrosa is also working with the Moscow bank investment titan, Leader, which markets the stockpiled diamonds to foreign investors. Under the Alrosa plan, foreign investors would buy the stockpiled diamonds, but not release the gems for several yeas.