Amidst sanctions and geopolitical pressures, Alrosa, the sanctions-hit Russian diamond producer, revealed a 2.8% year-on-year decline in its 2023 diamond output, totaling 34.6 million carats. The company emphasized that this output matched its initial production plan, showcasing resilience “despite the negative external environment.”
As the world’s largest producer of rough diamonds by volume, accounting for 30% of the market, Alrosa encountered US sanctions in 2022 following Moscow’s invasion of Ukraine. The company now faces additional challenges from the G7 countries’ proposed 2024 ban on Russian gem imports.
Analyst Paul Zimnisky noted Alrosa’s apparent commitment to maintaining stability amid sanctions, citing their consistent production and ongoing investment in long-term capital expenditure, such as the redevelopment of the Mir mine.
Zimnisky estimated that Alrosa has been stockpiling a portion of its production over the past two years. Consequently, the company’s 2023 diamond sales plummeted by an estimated 25-30% compared to pre-sanction levels due to high market stocks.
Despite Alrosa’s silence on sales figures post-sanctions, the entire global mining sector faced disruptions between mid-October and mid-December. India, housing 90% of the world’s diamond cutting and polishing industry, suspended imports during this period to manage an accumulated stockpile amid sluggish demand.
As India resumed rough diamond imports on December 15, industry expert Zimnisky anticipated a potential recovery for the global diamond industry in 2024. He noted that the supply surplus appeared more manageable by the end of 2023, with diamond prices stabilizing and certain categories even witnessing recent price advances.
Customs data accessed through Trade Data Monitor revealed India as the primary purchaser of Russian diamonds in 2023, with significant supplies also directed to Belgium, Hong Kong, and Armenia. However, Russia has not disclosed its export or import data since the Ukraine invasion, adding opacity to the market dynamics.
