Alrosa gets own security force
Diamond giant PJSC Alrosa announced this week that the Russian government has authorized it to establish a departmental security service to protect the company’s production facilities in the country.
Alrosa, together with energy giants including Rosneft and Gazprom, is on a list of strategic enterprises under the Decree of the President of the Russian Federation. According to Rinat Gizatulin, Alrosa VP, when the company takes over security duties at facilities located in remote and hard-to-reach regions of the country, the state will be able to save up to RUB 200 million ($3.1 million) a year.
30 companies had their creditworthiness downgraded including marquee names like Rio Tinto, BHP Billiton, Goldcorp and Chile’s state-owned Codelco, but last month Alrosa became a rare breed in the today’s mining industry after its credit rating was upgraded.
Credit ratings agency Moody’s said its decision reflects the fact that the Russian giant’s financial metrics “have remained strong versus global peers” and will remain robust, “owing to the company’s status as a major producer and exporter of diamonds and weak rouble, the company’s 29% share in the global diamond output, its low-cost reserve base, technical mining expertise, solid liquidity and conservative financial policy.”
The outlook for Alrosa, 77%-owned by Russia and the Republic of Sakha (Yakutia), is negative, but that’s in line with its assessment of the sovereign rating of Russia says Moody’s. The 60-year old group operates across nine countries and ten regions of Russia.
Alrosa’s output climbed to 38.3 million carats, a 6% increase when compared to the previous year, thanks mainly to improvements at its Mir and Udachny underground mines, as well as the commissioning of Karpinskaya-1 and Botuobinskaya pipes and other high-potential deposits.
Alrosa, which together with Anglo-American unit De Beers produces more than half of the world’s diamonds, also saw its reserves grow last year to 43.6 million carats. Despite poor global diamond market conditions, the company sold 3.8% more rough diamonds and increased sales 8% to $3.4 billion.
Alrosa, which along with fellow Russian resources firms Rosneft and Bashneft are among the most likely candidates for privatization by the Kremlin, is worth $8.1 billion in Moscow (RUB 510 billion) after rising by 23% in value this year.