Gokhran May Purchase Alrosa Rough

RAPAPORT… Alrosa is in talks to sell a considerable volume of diamonds to Gokhran, Russia’s repository for precious metals and gems.

The Yakutia municipality, which holds a stake in Alrosa, has proposed that Gokhran buy diamonds worth $1.7 billion from the mining company this year, Reuters and the Russia-based Interfax news agency reported on Tuesday. A spokesperson for Alrosa confirmed the parties were discussing a sale, but said the miner was unaware of the reported amount.

Yakutia governor Aysen Nikolaev proposed a move to sell between $500 million and $1 billion of rough to Gokhran in 2019, the spokesperson told Rapaport News Wednesday.

“Currently only this amount is being discussed. This issue is under consideration, and the Ministry of Finance will make the final decision,” the spokesperson said. “We are not aware of any new initiatives on selling $1.7 billion of diamonds to Gokhran.”

The proposed deal comes amid weak demand in the diamond market that left Alrosa with an inventory of 21.1 million carats as of March 31. That number likely increased since then, after the miner’s diamond sales plummeted 95% to $15.6 million during April, its lowest level on record.

Alrosa has sold diamonds to Gokhran in the past, most notably a reported $1 billion worth of rough in 2009 during the economic crisis. Gokhran also purchased diamonds valued at $100 million from the miner in 2004 and an undisclosed amount in 2012.


Image: Rough diamonds. (Alrosa)