Russian sanctions-hit diamond producer Alrosa said on Friday that its 2023 output fell by 2.8% year on year to 34.6 million carats, matching its initial production plan “despite the negative external environment”.
Alrosa, the world’s biggest producer of rough diamonds by volume with 30% of the market, was hit by US sanctions in 2022 when Moscow invaded Ukraine and is now facing a further hit from the G7 countries’ 2024 plan to ban imports of Russian gems.
“Alrosa seems to be proceeding as if the sanctions will not derail its business. They are holding production relatively steady and continue to commit to longer-term capex as is the case with redevelopment of the Mir mine,” diamond analyst Paul Zimnisky said.
Zimnisky estimates that Alrosa has been stockpiling part of its production over the last two years and that the company’s 2023 diamond sales fell 25-30% from the pre-sanction levels due to the high market stocks.
Alrosa, which competes with De Beers – the world’s largest producer by value, has not disclosed its sales since the sanctions were imposed.
All global miners were affected between mid-October and mid-December when India, home to 90% of the world’s diamond cutting and polishing industry, suspended imports to manage accumulated stockpile amid weak demand.
As India resumed rough diamond imports on Dec. 15, the global diamond industry faces a recovery in 2024, Zimnisky said.
“The supply overhang seems to be much more under control coming out of 2023, and diamond prices seem to have stabilised with certain categories even advancing in recent weeks,” he said.
India was the largest buyer of the Russian diamonds in 2023, customs figures accessed through Trade Data Monitor show, with significant supplies also going to Belgium, Hong Kong and Armenia. Russia has not disclosed its export or import data since it invaded Ukraine.
(By Polina Devitt; Editing by Jan Harvey and Nick Macfie)