ALROSA To Focus More on Polished Colored Diamonds

Polished
17/05/2018 09:35

The world's leader in rough diamond output, Russia's ALROSA, plans to boost revenue from selling rare, colored stones where demand is stable, according to the head of ALROSA's sales division Evgeny Agureev. The global market for polished colored diamonds is now dominated by Rio Tinto and De Beers, but it apparently ALROSA aims to makes some changes to its sorting and processing in order to compete. “We hope that ... Alrosa will become one of the global leaders in sales of polished colored diamonds,” Agureev told Reuters, adding that the stones would come straight from the producer, ensuring “transparent origin” in an industry that has been working hard to prevent stones that have been mined in areas that could fuel conflict from reaching the market.

As is common practice in the industry, ALROSA creates assortments of rough diamonds that it sells in bulk, but has apparently not focused on sifting out the colored gems that can earn a premium. Its diamond polishing business of clear and colored stones has been modest to this point, generating just 2 percent of its total $4.6 billion revenue in 2017. Agureev said that, starting from 2018, ALROSA would sort its diamonds into 19 categories of stones and would aim to polish most of these to secure higher prices, although the miner in earlier comments made it clear that it is not planning to make the polished diamond trade a key part of its strategy, despite talk that it may be integrating Russia's largest diamond manufacturer, Kristall Smolensk, in order to "support the country’s gem-cutting industry and help create a stronger competitor to global group De Beers."

While profit margins are lower in the global polishing industry than the rough diamond business, Reuters says that ALROSA is confident it can earn more from selling cut and polished colored gems. The market for fancy colored diamonds, while small, has certainly had a great deal of helium lately at the auction houses. “The market for fancy diamonds is relatively small given the inherent limited supply and the end-demand is primarily a relatively small group of wealthy individual buyers that are less sensitive to price,” said diamond analyst Paul Zimnisky. “Selling fancy diamonds through a separate channel could allow for more price efficiency as it would attract a more competitive niche group of industry buyers,” he added.