ALROSA Presents New Model of Long-term Agreements

Rough Market
25/11/2021 15:57

Russian miner ALROSA announced they are implementing a new system for their long-term agreements and rough diamond allocation principles. The new system ensures that specifications meet clients’ requirements as closely as possible by taking the specific business needs of each diamond consumer category - diamond cutters, traders and jewelry retailers - into account, in addition to the client’s purchase history.

According to ALROSA, this new approach is based on the lessons learned during the 2019-2020 crises, taking into account the specifics of different types of rough buyers and preventing volatility and dependence on outside factors, reinforcing stability in the diamond industry. The system is set to be implemented for the next three-year supply period running from 2022 to 2024.

Evgeny Agureev, Deputy CEO of ALROSA: “The diamond market has successfully overcome two of the gravest shocks in a row. The local industry crisis in 2019 and the subsequent global coronavirus pandemic have transformed the industry, making it much more transparent and open for discussions. After the transitional period of 2021, the time has come to start a new contract period. On the other hand, the market needs a new model of long-term agreements in rough diamond trade to help withstand external shocks. The key distinction of this new system is its division of contracts and goods depending on the clients’ business activity. We give special priority to creating added value at all stages of a diamond’s journey. The continuous open dialogue we have been having for recent years has allowed us to improve the understanding of our customers’ needs even further. Thanks to this, we are now able to tailor extremely unique specifications for each client, ensuring the most effective buyout. This approach has been approved by the regulatory body, so the January 2022 trading session will follow these new rules.”

Long-term contracts with ALROSA guarantee a monthly supply of rough diamonds of previously specified categories and volumes, as well as an option to request additional goods. The updated list of ALROSA ALLIANCE members will be published in December.