Loose Diamonds Search

Diamond News >> Embattled Alrosa Looks Toward African Diamond Deposits

Embattled Alrosa Looks Toward African Diamond Deposits

Alrosa, the fifty-year-old Russian diamond monopoly, has a lot on its plate these days. Not only does the Russia government want to gain control of it — apparently so they can break it up and rearrange the pieces into a state-run minerals consortium — but in February 2006, the European Trade Commission ordered De Beers Group, the world’s biggest diamond company, to stop buying Alrosa’s diamonds. The idea was to open up the Russian diamond market to competition, but the practical effect was to deprive Alrosa of its largest trading partner. That issue is expected to come to a head within six months, whenever Alrosa’s appeal of the Commission’s ruling works its way through the European Court of Justice.

Alrosa remains confident that the Trade Commission ruling will be overturned, allowing them to continue their profitable relationship with De Beers — or at least that’s the party line. Meanwhile, they’ve begun looking elsewhere for diamond trading partners. On September 20, 2006 Alrosa’s president, Alexander Nichiporuk, announced that his firm was poised to begin exploiting diamond fields in Guinea, and possibly the Democratic Republic of Congo — assuming the political situation in that nation stabilizes soon. With this move, Alrosa accomplishes two things: it recoups losses due to declining diamond sales to De Beers, which ordinarily purchases about 27% of Alrosa’s yearly production; and it expands its stake in the worldwide diamond market. It’s expected that if the negotiations to develop the African diamond deposits go through, Alrosa will end up controlling about 25% of the world’s rough diamond market.

Alrosa, which is partly owned by the regional Russian government of Sakha, already has a virtual monopoly on diamonds in Russia, controlling 97% of the supply. Although laymen don’t often think of Russia as one of diamond-rich areas of the world, in fact about 20% of all rough diamonds originate there. In 2005, before the EU Trade Commission ruling went into effect, Alrosa sold between $3 billion and $3.5 billion worth of diamonds, clearing about $55 million in profit. In the first half of 2006, sales totaled $1.71 billion, about a third of that to Russian buyers.

In addition to sidestepping the EU problem, the move into Africa appears to be a part of a strategy to diversity Alrosa’s holdings so that the company doesn’t depend entirely on diamonds for its bread and butter. The company recently acquired a controlling share in the petroleum holding company Sakhaneftegaz, and has announced a collaborative effort with Russia’s state-run oil company, Zarubezhneft, to develop oil and gas fields in Angola (which borders the DRC). This diversification will also help them hedge their bets against currency losses, as the ruble steadily appreciates in value. The ruble’s appreciation is a good thing for Russia, but a bad thing for a company that depends on exports to make its profits.

Alrosa seems to be managing its problems well. It’s has already thumbed its nose at the Russian government’s declaration, earlier this year, that the diamond monopoly would be broken up by July 2006; and the EU ruling, while troublesome, has yet to cripple it. Though it remains monopoly in its homeland, it has proven itself nimble enough to duck international problems and continue to survive and even expand, which is the ultimate proof of success in any business. Whether that’s good for the diamond trade, and for the billions around the world who love diamonds, remains to be seen.



diamonds Best diamond prices online
loose diamonds Free FedEx shipping to the USA
engagement rings No risk 30 day money back guarantee
diamond rings All engagement rings are made in the USA
wedding rings Registered with the Better Business Bureau
certified diamonds Huge selection of high quality diamonds
  More Reasons >>

Just a quick Thank You. The ring is perfect and the service was even better! Delivered, as promised and on time. I wish all of my purchasing experiences were as good. Thanks....
Terry

View More


Just wanted to let you know that my fiance loves the engagement ring. I also had it appraised, and the jeweler said it was a beautiful stone. He was also very impressed with the quality...
Alex

View More


We wanted to thank you for the spectacular and stunning job on our wedding bands, as well as my engagement ring! The quality of the diamonds Novori offers are truly magnificent! The way that the...
Michael & Barbara

View More


I just wanted to say Thank You for your help with the engagement ring. I got it last week, and Veesha (my fiancé) loved it. I owe you big time! You were...
Vishal

View More


I proposed to my now fiance the other day and she honestly cannot take her eyes off of her ring. I leave for work, she is staring at it, I come home and she...
Zach

View More


Thanks a lot for your assistance through this process. You've been a huge help, and I will be sure to let others know of my experience with you. I didn't think the timing and everything...
Victor

View More


My fiancée and I couldn't be happier with the ring we got from Novori! The staff patiently helped me search for the perfect stone; while still keeping within my budget. The setting was...
Jason

View More


I found Novori through the internet. The website was very easy to use and assisted me in building my own ring. After doing so, I thought a mistake was made so I called,...
Zach

View More


I wanted to drop you a line to let you know how satisfied I have been with your products and service. I ordered both my fiance's engagement ring and my wedding band from Novori...
Vince

View More


I received my ring today, and I just wanted to say that it is gorgeous and I absolutely love it! You did a phenomenal job. I will definitely recommend Novori to anyone I...
Jacqui

View More


I just like to say that you have provided exceptional customer service and all my expectations have been met. I had my diamond ring appraised in Canada and it was exact to specs even...
Andrew

View More


Received rings. Wanted you to know that you did an excellent job making and packing the rings. The look on my fiancee's face was worth every cent. Bookmarked your web page so I...
Eddie

View More


I just wanted to let you know that I received my ring last week. There were delays over the weekend in customs. The ring is very nice. I just had it appraised...
Scott

View More


I just wanted to let you know I received the engagement ring I purchased. It's exactly what I wanted. Simple and elegant, thanks so much I'm sure my girlfriend will love it....
Adam

View More


I just wanted to let you know that the shipment arrived yesterday without any issues. Thank you so very much for all the help, and the excellent service. I continue to be impressed...
Robert

View More



Diamond Jewelry Member
Novori BBB


Diamond Rings Payment Options

Credit Card Processing

 
  |    Home  |   Contact Us  |   Payment Policy  |   Return Policy  |   Privacy Policy |   Engagement Rings News  |   Diamonds  |   SiteMap  |  
   
  © 2004-2025 Novori Jewelry Inc. All rights reserved.     Terms and Conditions