Alrosa Votes to Consolidate Nyurba Mining Division

Mining and Exploration
12/09/2019 15:03

Alrosa's Supervisory Board has voted to liquidate a subsidiary that controls two of its largest mines in a move to consolidate its core assets with the aim of improving their management efficiency. The Russian miner owns a 97.49% stake in Alrosa-Nyurba, with the remaining 2.51% of shares in the hands of minority shareholders. Presuming the liquidation goes through, those assets will be incorporated into Alrosa. The company’s 2018 revenue amounted to RUB 44 billion ($680 million) with a net profit of RUB 16.6 billion ($260 million). Production from the two mines totaled 4.6 million carats, representing 26% of the 17.6 million carats Alrosa has produced in the first half of this year.

Alrosa-Nyurba holds the licenses for the Botuobinskaya and Nyurbinskaya pipes but is not directly engaged in any production operations. The whole production cycle – from geological exploration, mining and rough diamond processing to sorting, presales preparation and subsequent sales – is carried out on contract terms by Alrosa’s business units. The liquidation is part of the strategy aimed at improving the management efficiency and optimizing the Alrosa Group structure. Alrosa’s management deems it expedient to consolidate core assets, including licenses, on the parent company’s balance sheet by liquidating Alrosa-Nyurba. The matter of voluntary liquidation will be submitted for consideration to the Board of Directors of Alrosa-Nyurba, and then to the company’s Extraordinary General Meeting of Shareholders, that may take place in early November.