As the worsening situation in the world's biggest diamond cutting and manufacturing centre in India has started affecting the entire diamond value chain in the global market, Russian diamond mining company, Alrosa - world's biggest mining company after De Beers - has come to the rescue of Indian diamantaires.
For the first time since the downturn in 2009, Alrosa has sold an
estimated $130 million worth of rough diamonds to Russia's state-owned
Gokhran in the second quarter of 2012 in order to bring price stability
and to reduce the supply of rough diamonds in the global market,
especially in India.
The company spokesperson, without
disclosing the exact amount of rough diamonds sold to Gokhran, explained
that the aim was to reduce its supply to the market after witnessing
its customers' acute financing problems during the second half of 2012,
which led to the decline in demand for rough diamonds in the first half
of 2012. By reducing its supply to the market, Alrosa maintains what it
calls an acceptable level of price stability during a period of lower
Alrosa's move, according to industry experts, is
expected to turn the fortunes of the Indian diamantaires and that they
could hope for a speedy recovery in the polished diamond prices - the
prices fell by 20 per cent in the past six months--before the
forthcoming Christmas season.
"The global diamond mining has
gone down this year and that there is a short supply of rough diamonds.
This may further increase the rough diamond prices in the short term.
However, the Alrosa took a wise decision of selling a huge stock of
rough stock to Gokhran in order to reduce the diamond supply in the
market. This will not only give stability to rough diamond prices, but
it will also increase the prices of polished diamonds," a DTC
sightholder, who is also a client of Alrosa, said.
Beers, Alrosa's annual supply of rough diamonds is pegged at $5 billion
and that it prefers to sell its goods to its clients based in India,
Israel and Belgium through long term supply contracts. India is the
biggest rough diamond importer with about $11 billion of rough stones
imported in 2011.