Russia’s Finance Ministry Agrees to Purchase Alrosa Rough

Alrosa has made a deal with Russia’s Ministry of Finance to sell it a portion of this year’s rough production amid tightening sanctions, according to reports.

In March, Gokhran bought its first rough from the miner, which encompassed its entire production cut, sources close to the situation told Interfax news agency Wednesday. The source also confirmed that Gokhran is expected to buy regularly from Alrosa throughout the year.

While the total amount Gokhran will purchase has not been disclosed, it is thought to be more than the $100 million to $200 million the ministry previously bought from Alrosa during times of slow demand, most notably during the 2009 economic crisis. In 2020, Alrosa was in talks to sell about $1.7 billion in rough to the precious metals and gems repository. According to the 2024 budget limit for the purchase of precious metals and stones, Gokhran can buy only up to RUB 51.5 billion ($558.1 million), Interfax noted.

At the start of the month, the US, the UK and the European Union issued tighter sanctions on Russian rough, with those restrictions due to increase in September following an initial “sunrise period.”

Alrosa declined to comment on the Gokhran sale when reached out to by Rapaport News.

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Main image: Rough diamonds. (Alrosa)