2024-07-03 22:16:08
Russian diamond producer Alrosa has just bought a gold deposit in Western Russia, formerly owned by the Polyus company. This property is not surprising for the mining industry under Western sanctions.
Investments are never easy. And even less when it is a company under sanctions, which sees its net profit fall by 15% in 2023.
Alrosa’s core business is diamonds, but the missing diamond: after the United States in 2022, the G7 countries have united their voice to ban, as of January 1, diamonds imported from Russia, except those intended for industrial use. Since March, Russian diamonds sold by third countries, such as India – number 1 in polishing – have also been banned. The measures which should be used wisely cause the company’s profit to fall a little further in 2024.
Target: 3.3 tonnes by 2030
At this point, the announcement of the acquisition of a new deposit in the Western part of Russia (Magadan region) is not necessary. First, Alrosa needs to restart its tax classification process. The diamond giant had previously invested in the sector in the past before losing interest in recent years.
The current production is 180 kilos of gold, but it can reach 3.3 tons per year, with the purchase of the site previously owned by the Russian company Polyus.
Economically, the context is interesting: diamond prices have fallen sharply in the past two years, while gold prices have risen, explained an engineer in the sector. The gold market is known to be more liquid than diamonds: transactions are easy, cheap and therefore abundant. The boss of Alrosa, Pavel Marinychev, did not hide that by expanding his portfolio, he came to ” bring long-term financial stability » of your company.
We must not forget that Alrosa has a line of furniture: doing more will increase the direct supply.
An investment” objective »
« It is a purposeful job » the collection of a mechanic in the sector, because Alrosa has the relevant experience and the investment made is not great at this stage – 276 million dollars in addition to the purchase of the deposit, the amount has not been revealed. Especially since this investment is planned by injection of liquid through Gokhran, a company based on the Ministry of Finance of Russia: to get the group back afloat, the State has bought part of Alrosa diamonds since the beginning of the year.
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