Focus on

rough diamonds

A remote-controlled drilling rig at Alrosa’s Jubilee open-pit mine in Yakutia. (Photo courtesy of Alrosa)



Reporting its results at the end of the third quarter of 2021, Alrosa, the state-controlled Russian diamond mining company that along with De Beers produces in excess of 70 percent of the world’s rough output, has provided a relatively upbeat view of the market.

While the average realized price for gem-quality diamonds during the third quarter declined by 6 percent from the three-month period that preceded it to $136 per carat, which it said was due to changes in the sales mix on the back of increased supplies from assets with lower prices.

This came against the backdrop of 2 percent year-on-year growth, and a 22 percent uptick in the price index, which was, the company said, a result of the normalization of sales volumes, as well as by changes in the sales mix. The rough diamond price index has returned to 2018 levels, with polished diamond prices surpassing the average of that year, Alrosa stated.

The third quarter average price index gained 10 percent quarter on quarter, and 25 percent year to date, which was 12 percent more than where it stood at the start of the 2020, before the onset of the COVID crisis.



Rough and polished diamond sales by Alrosa reached $938 million during the July through September period, 20 percent lower than the quarter before, but 59 percent more than year on year.  $904 million of the amount was made of rough goods and $34 million by polished materials.  

Sales during the first nine months of the year total $3.27 billion, some 2.1 times more than the corresponding three-quarter period in 2020, which of course was impacted head on by the coronavirus crisis.  $3.13 billion of that was from rough diamond sales, and $141 million from the sale of polished diamonds.

Diamonds output was up 26 percent quarter on quarter, although 5 percent down year on year,  to 8.8 million carats. This, the company explained, was the result of the seasonal growth in gravels processing from Almazy Anabara, increased processing of ore at the Udachny Division, and planned rise in output at the Nyurbinskaya pipe.

Third quarter diamond sales equaled 9.2 million carats, including some 700,000 million carats purchased as part of the Gokhran auctions during the second and third quarters, a decline of 20 percent quarter on quarter, although 83 percent up year on year, mainly due to the lack of rough diamond inventories available for sale. Sales of gem-quality diamonds totaled 6.5 million carats.

Sales of rough diamonds by Alrosa during the first nine months of 2021 totaled $3.13 billion. (Photo courtesy of Alrosa)

Demand for rough diamonds remains strong, Alrosa stressed. The company predicts that supply shortages will continue to be offset by a recovery in rough diamond prices. The company maintains its policy of satisfying only requests backed by the real demand to ensure sustainability of the whole diamond pipeline.

A view from the bottom of Alrosa’s Komsomolsky open-pit diamond mine, which has been operating in Yakutia since 2002. (Photo courtesy of Alrosa)


Jewelry demand is strong in all the key markets, Alrosa reported. At the same time, rough diamond stocks held by miners are at minimal levels, as supply structurally dropped. Alrosa sees a limited risk of any meaningful supply response globally.

End demand remained stable in the key American market, Alrosa said, and was supported by demand recovery in other regions, including Europe, the world’s third largest jewelry market.

In China, however, demand growth slowed, as a number of drivers impacted the country’s overall economic growth.

The market is optimistic about the upcoming Christmas season, which in the United will see an earlier than usual start this year. Jewelers started placing orders for polished diamonds as early as July, Alrosa noted.

The midstream has been gradually ramping up its cutting capacity after stocking up on rough diamonds in the first half of the year, Alrosa reported. Increased production of polished diamonds is due to completion of holiday orders for the United before Indian cutters close down for the Diwali festival celebration, which will start on November 4 and last two to three weeks.

Polished diamond prices stabilized in August and September, supported by solid demand from the United States and a seasonal increase in the inventories of some of the categories of polished diamonds.