Alrosa (MCX: ALRS), the world’s top diamond miner by output, is ready to auction one of the largest-ever gem-quality stones the company has dug up since 2000, as an industry-wide recovery from the coronavirus pandemic gathers pace.
The 242.31-carat diamond, slightly larger than a walnut, will be showcased at the company’s sales office in Dubai from March 14 to 21. Results of the auction will be announced on March 22, Alrosa said, adding that the starting price will be a little over $2 million.
The crystal-clear diamond was discovered at the Nurbinskaya deposit in Russia’s Far East more than a decade ago. The company also plans to sell two gems, 190.7 carats and 136.2 carats each, as well as other smaller stones at the event, which is Alrosa’s 100th international auction.
Diamond prices are recovering after the pandemic brought the industry to an almost complete standstill in the first half of 2020. Strong holiday sales in the US and positive signs from the Chinese New Year have prompted buyers to replenish their rough stones stocks.
Russia’s Alrosa is only allowed to sell rough diamonds over 10.8 carats at auctions. First, however, it must offer those larger than 50 carats to the Gokhran state repository.
Alrosa first offered a rough diamond of similar size at open auction held in Moscow in 2003.
Over the past decade, Alrosa “auctioned just a handful of diamonds larger than 200 carats of comparable quality, as they are extremely scarce and the company often preferred cutting and polishing rare finds in-house,” chief of sales Evgeny Agureev said in the statement. The auction is especially important as a year ago “our entire industry faced the toughest call in its history,” he said.
De Beers, the world’s largest diamond producer by value, beat pre-covid sales levels in January, which was seen by experts as a further sign that the sector is bouncing back.
Dmitry Glushakov, Head of Metals & Mining Research at VTB Capital, believes the positive momentum in the rough diamonds segment will last a few months, allowing miners to continue selling down inventories.
The investment arm of VTB Group, one of Russia’s largest banks, estimates that global rough diamond output was down 19% last year to 112 million carats.
It expects 2021 production to be little changed as the full depletion of Rio Tinto’s Argyle mine in Western Australia fully offsets the yearly production pick-up at the world’s largest diamond producers.