Russia’s Ministry of Finance has been purchasing diamonds from state-owned miner Alrosa, according to a reports from the news service Interfax and the trade publication Rough & Polished.
A source told Interfax that these purchases will support the miner in light of G7 sanctions against Russian gems, which were ramped up March 1.
“This will allow Alrosa to partially compensate for the lost income due to the current chaos in the industry caused by the ban on Russian stones,” the person said.
The publication said the Gokhran—the State Fund of Precious Minerals and Precious Stones, which is part of the Ministry of Finance—purchased Alrosa’s “entire production cut” for March, though it did not specify the dollar amount.
“It is expected that such transactions will be held regularly this year,” the publication said.
Industry analyst Paul Zimnisky calls the move “notable,” and a seeming sign that the G7 sanctions are having an effect on Russian gem sales.
“These are goods that are not going into the market, which is especially important right now as the industry works to de-stock excess supply,” he adds. “This should be supportive of price fundamentals.”
When sanctions against Russian gems were first proposed following the 2022 invasion of Ukraine, Russia’s finance minister raised the possibility of the Gokhran buying part of Alrosa’s production, as the government had done following the 2008 financial crisis. But in June 2022, Alrosa said it had no need to sell to the Gokhran, as the company was “well funded,” and the diamond market was then strong. Now with a weaker market and tougher sanctions, the Gokhran apparently is again acting as the miner’s safety net.
Alrosa and the Gokhran did not return requests for comment by press time.
Photo courtesy of Alrosa
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