Russia’s Alrosa (MCX:ALRS), the world’s top diamond producer by output in carats, said Tuesday that sales of rough and polished gems picked up in November.
Total diamond sales last month amounted to $255.2 million, 63% higher compared to November 2015, the company said.
Alrosa, which together with Anglo American’s De Beers controls almost two-thirds of the diamond market, acknowledged the impact of India’s recent decision to pull 500- and 1,000-rupee bills from circulation as part of Prime Minister Narendra Modi’s campaign against corruption.
About 80% of the world’s diamonds are cut and polished in India by players who normally pay for their rocks upfront and sell on credit. With Modi’s notes withdrawal, that link in the industry is beginning to get weaker, analysts say.
“One of [India’s currency reform] effects was a temporary decline in the activity of India’s small and middle-size diamond cutting companies, which also affected the low-end small-size rough diamond segment,” Yury Okoemov, Alrosa’s vice president said in a statement.
Activity in other market segments, added the executive, remains high.
Diamond producers are used to the up and downs in sales as they know the industry is seasonal, reaching its peak from November through to February.
Alrosa said earlier this year it intends to recover 1.7 million carats of diamonds a year from its Verkhne-Munskoye mine, which is slated to begin production in 2018.
The construction of that mine, which has 38.3 million carats of booked reserves, is part of a long-term development program that aims to increase Alrosa’s diamond production to 41 million carats by 2021.