Diamond markets under pressure – Rapaport

Rapaport published a report stating that diamond markets are under pressure as profit margins have tightened and the trade war with China has fueled uncertainty.

The international firm revealed that the RapNet Diamond Index, known as RAPI, for 1-carat diamonds fell 0.7% in May and is down 1.7% since the beginning of the year.

RAPI is the average asking price in hundred $/carat of the 10% best-priced diamonds, for each of the top 25 quality round diamonds offered for sale on the Rapaport Diamond Trading Network.

Stones weighing 3 carats saw the most dramatic change, with a 4% drop in May and a 9.8% drop since the beginning of the year.

To try to boost sales, polished suppliers are offering technology and source verification as a value-added service

Diamonds of 0.30 carats sunk by 3.7% in May and 9.4% since the start of the year, while 0.50-carat rocks fell 1.7% last month and 2.9% year to date.

"There is good demand for 0.60- to 1.99-carat, F-J, VS2-I1 diamonds. Buyers are insisting on well-cut stones. Polished below 0.50 carats is slow due to excess supply, weak Chinese demand and tight Indian liquidity," the report reads.

According to Rapaport, this state of affairs has pushed cutters to operate at lower capacity as they try to reduce inflated inventory, while manufacturers are rejecting high-priced rough stones that have made polished production unprofitable.

"De Beers and Alrosa are carefully managing production and price levels amid this year’s slow rough demand," the document states.

In the view of the firm's chairman, Martin Rapaport, if the trade does not change its business practices and adapt to new realities, the diamond industry will suffer "extreme financial and regulatory disruption."

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Alrosa recovers large diamond from International pipe

Alrosa's (MCX:ALRS) International mine produced this month the largest gem-quality diamond seen in the past two years.

In a press release, the world's top diamond miner by output revealed that the stone weighs 118.91 carats, displays a light yellow overblown, has salient edges, one of them with cleavage, and has small inclusions in the central zone.

The International deposit was first discovered in 1969. By the time it was fully developed, reserves were estimated in more than 100 million carats.

"This crystal is unique as it has a large clean area despite the inclusions in the center – this makes it a gem-quality diamond," Evgeny Agureev, Director of the United Selling Organization at Alrosa, said in the media brief. "Well-known hallmarks of the diamonds from the 'International' kimberlite pipe are regular shapes and purity. That is exactly the pipe that most often brings Alrosa regular shape octahedrons with smooth edges."

Agureev said that a similar rock -a 109.61-carat diamond- was mined at the International pipe in the summer of 2017.

Given that the new gem was mined on April 16, 2019, the eve of the launching of Alrosa's Zarya deposit, it will carry the name of the mine.

The International mine, which reached full production rate of 500 kt/a in 2002, is located 16 kilometres south-west of the town of Mirny, in east-central Russia. Mineral resources in the measured category are 20,157 kct, while in the indicated category are 29,608 kct. Approved reserves are characterized by a high diamond content in ore, about 7-8 carats per tonne on average.

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One of world’s largest diamond mines gets 10-year life extension

Russia’s Alrosa, the world's top diamond producer by output, is extending the life of its Aikhal mine to 2044 by digging deeper into the ground, in a project estimated to cost about RUB 10 billion ($16m).

The 300 metres underground extension, the company said, will add almost 20 million carats to the raw material base of the Aikhal mining and processing division, allowing it to keep annual output at 500,000 tonnes of ore.

Underground extension of Aikhal is estimated to cost about $16 million.

"The project is also attractive because there's no need for major re-equipment or new infrastructure,” Evgeny Denisov, Director of Aikhal Mining and Processing Division said in a statement.

The Aikhal mine, located in the north-eastern part of Russia in the Sakha Republic, is one of the country’s and the world’s largest diamond mines.

The operation is part of the namesake division, which also includes two open-pit mines — Yubileyny and Komsomolsky. Last year, the unit mined almost 12 million carats worth more $1.2 billion.

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Alrosa launches new Zarya pipe in eastern Russia

The world's top diamond producer by output, Alrosa (MCX:ALRS), announced this week the launching of diamond production at its Zarya pipe in Yakutia, eastern Russia.

The new 300-meter deep deposit, operated by the Aikhal Mining and Processing Division and which started to be prepared for mining in 2016, is expected to have a mine life of over 10 years.

To prepare the Zarya pipe, 14 million cubic meters of overburden were removed and a roadway, hydraulic engineering structures and infrastructural facilities had to be built.

In a media statement, Alrosa said that it spent $187.8 million in the development of the Zarya primary diamond deposit, which makes it is one of the company’s major investment projects in recent years.

According to the miner, the decision to allocate funds to this project was driven by the fact that there is no need to build a new mining and processing division and a plant because Zarya is located in the operational zone of the Aikhal Mining and Processing Division.

Besides the operational advantages, Alrosa said Zarya’s production is also expected to make up for dwindling resources at other sites.

“The new deposit will allow compensating for the depleting stock of Komsomolsky open-pit mine and looking forward it will ensure stable mining for the division,” the media release reads. “In 2021, according to the development roadmap of Aikhal Mining and Processing Division, the enterprise is to reach the design capacity of 1.25 million tons of ore per year and process rough diamonds at the Plant No. 14. The plan is to mine the first 100 thousand tons of kimberlite ore in 2019."

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Alrosa says Verkhne-Munskoye deposit is more prolific than previously thought

The world's top diamond producer by output, Alrosa (MCX:ALRS), ran an experiment at its Zapolyarnaya pipe, which is a part of the Verkhne-Munskoye deposit in the west of Yakutia, and found that the area has the potential to become one of its richest in large diamonds deposits.

The test, which took place from March 11 to March 15, 2019, consisted in feeding the processing plant N12 in the town of Udachny with ore exclusively from the northwestern part of the Zapolyarnaya pipe. Besides analyzing the colour characteristics of diamonds and the cost of one carat in this particular part of the pipe, those conducting the research activity discovered that the grades of the rocks seemed to be higher than expected.

The Verkhne-Munskoye deposit is expected to generate 1.8 million carats of rough diamonds per year until 2042.

During the five days that the experiment lasted for, Alrosa’s experts extracted 239 diamonds larger than 8 carats. This is more than 3.5% of the number of diamonds unearthed throughout the assessment period.

According to Andrey Cherepnov, the company’s Chief Engineer, there were two gem-quality stones weighing 51.15 and 70.67 carats among the extracted large diamonds. Four massive diamonds of lower quality were also mined, the largest one weighing 268 carats.

The Verkhne-Munskoye deposit, situated 170 kilometres from the town of Udachny and Alrosa’s largest investment project, hosts four kimberlite pipes, Zapolyarnaya, Deimos, Novinka, and Komsomolskaya-Magnitnaya. Earlier this year, it produced two large high-quality diamonds weighing 51.49 and 98.8 carats and it is expected to generate about 1.8 million carats of rough diamonds per year for more than 20 years.

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Alrosa’s Mir mine won’t reopen before 2030

Russian diamond miner Alrosa said on Monday studying whether it's viable to reopen it Mir mine which was shuttered in August 2017 due to flooding, would take more than 4 years.

According to the state-controlled company the work requires deep level exploration down to -1,300 metres to confirm the mine's reserves and will cost about $30.3 million (RUB2 billion).

Exploration are scheduled to be completed by early 2022 and forms part of the company's $436m (RUB28.7 billion) capital expenditure programme for 2019.

According to press release "based on the results of the exploration works, pilot holes will be drilled to start preparation of deposit opening design documents (within 1 to 2 years). This work is to be completed before 2024."

"If the decision is made that restoring the underground mine is worthwhile, its construction would take six to eight years, based on initial estimates," the company added.

Last week Alrosa said its JORC Code-compliant resources and reserves as of 1 July 2018 are estimated at 1.064 billion carats and 628m carats, respectively.

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Alrosa’s resources estimated in over 1 million carats

The world's top diamond producer by output, Alrosa (MCX:ALRS), published this week an updated estimate of its Joint Ore Reserves Committee or JORC reserves and resources.

“The JORC Code-compliant report from Micon's independent experts estimated Alrosa's diamond resources and reserves as of 1 July 2018 at 1,064 million carats and 628 million carats, respectively,” the miner said in a press release.

With offices both in the United Kingdom and in Canada, Micon is an independent firm of geologists, mining engineers, metallurgists, and environmental consultants.

To run its estimate, Micon considered Alrosa’s assets located within the Russian Federation. Such properties include both operating mines and processing plants, and projects at various stages of development.

Mirny, Sakha Republic, Russia, November 14, 2013. Photo by Alrosa.

In detail, the report includes an evaluation of the deposits developed by the company’s four principal divisions, the Udachny, Aikhal, Mirny and Nyurba mining and processing divisions, and also by the subsidiary mining companies, PAO Severalmaz, and AO Almazy Anabara. Alrosa asked the consultants to exclude the operations of Catoca Ltd. Mining Co. in Angola, in which it has a 32.8% share.

The reserves estimate also excludes the Mir underground mine, located in eastern Siberia, where operations were suspended in August 2017, after water flooded into the mine shaft from the open-cast above trapping 151 people. The mine’s resources only were declared.

On the positive side, Micon reported an increase in reserves and resources indicated for Aikhal and International underground mines is due to extending the estimate’s perimeter to cover the deeper levels of these mines.

The international mine, which reached full production rate of 500 kt/a in 2002, is located 16 kilometres south-west of the town of Mirny, in east-central Russia. Mineral resources in the measured category are 20,157 kct, while in the indicated category are 29,608 kct. Approved reserves of International pipe are characterized by a high diamond content in ore, about 7-8 carats per tonne on average.

The Aikhal mine is located in the country’s northeast. In this case, measured resources were estimated in 57,227 kct, while indicated resources were 10,480 kct. Here, reserves contain between 6-7 carats per tonne on average.

Micon also reported a rise in reserves and resources for the prolific Jubilee and Karpinskogo-1 pipes, Almazy Anabara and a number of other deposits.

Earlier in the week, Alrosa issued a different report related to its sales volumes. The state-controlled miner informed an 8% fall year-on-year. However, the Russian giant noted that stronger pricing, particularly in the first half of 2018, meant sales by value increased by 6% to $4.4 billion.

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Alrosa’s February diamond sales up 23% over January

Alrosa, (MCX:ALRS) the world's top diamond producer by output, reported Thursday that total sales of rough and polished diamonds increased to $345.6 million, up 23% compared to January 2019 (up $64.1 million).

Rough diamonds sales in February increased to $340.6 million, compared to $278.2 million in January 2019, while polished diamond sales grew to $5 million, compared to $3.4 million a month ago.

"We see Indian mid-streamers’ activity gradually recover, despite some challenges hampering access to bank financing for the industry in this country,” Sergey Ivanov, Alrosa CEO said in a statement. “This sentiment is particularly noticeable for small and medium-sized rough diamonds. The company has moderately optimistic expectations of further smooth growth in demand and market activity."

Alrosa's total rough and polished diamond sales in January-February 2019 amounted to $627 million. The value of rough diamonds sold was $618.8 million for two months, and polished diamonds sales reached $8.3 million.

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Alrosa finds gem-quality diamond weighing almost 100 carats

The world's top diamond producer by output, Alrosa, (MCX:ALRS) has unearthed a rough diamond weighing 98.8 carats at Zapolyarnaya kimberlite pipe, which is the part of the Verkhne-Munskoye diamond deposit.

The rock, a unique transparent one with a visible yellow shade and of gem-quality, is the second major find since the launch of the deposit last October, Alrosa said.

“[The find] speaks about the great potential of the Verkhne-Munskoye deposit,” Evgeny Agureev, Member of the Management Board, Director of the United Selling Organization, said in the statement. “Not every kimberlite pipe regularly brings large diamonds over 50 carats. Especially when it comes to such a large crystal, like this one — weighing almost 100 carats.”

The first large gem-quality diamond, weighing 51.49 carats, was mined there in October last year.

The Verkhne-Munskoye deposit is expected to yield about 1.8 million carats of rough diamonds per year. According to Alrosa, its reserves are sufficient to continue mining for more than 20 years — until 2042.

Last month, the company found a white rough diamond weighing nearly 200 carats at its Udachnaya pipe, its largest find in more than two years. The asset ranks among the largest primary diamond deposits both in Yakutia and abroad.

Alrosa produces close to 40 million carats of diamonds annually from its Russian mines, or about 27% of the world’s total. That’s 18% more than its closest competitor, Anglo American’s De Beers.

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Heart-shaped diamond found in time for Valentine’s Day

The world's top diamond producer by output, Alrosa (MCX:ALRS), found a heart-shaped rough diamond at the Udachnaya kimberlite pipe in Yakutia, eastern Russia.

The stone weighs 65.7 carats and company experts say it may be over 300 million years old.

“Diamonds of a distinctive shape that resemble some object or symbol are extremely rare in nature. Most rough diamonds are octahedron-shaped or do not have a particular shape at all. The appearance of a heart-shaped rough diamond, especially on the eve of Valentine's Day, seems to be a symbolic gift of nature not only to our company but also to all loving couples,” said Evgeny Agureev, Director of the United Selling Organization at Alrosa, in a media statement.

The heart-shaped diamond may be over 300 million years old

This is not the first time that the Russian firm lays hands on a unique diamond. Last summer, just in time for the World Cup that was being hosted in its home country, a rough diamond in the shape of a soccer ball was found at the company’s Karpinskaya-1 pipe, located in the northern Arkhangelsk Region.

The heart-shaped gem was actually dug up on January 23, 2019, but it made its public appearance on February 14. The place where it was unearthed, the Udachnaya pipe, is located near the town of Udachny, some 550 kilometres north of Mirny.

Udachnaya was first discovered in 1955 but it took over 15 years for open-pit mining to start in the place. The pipe now ranks among the largest primary diamond deposits both in Yakutia and abroad and it consists of two ore bodies, the Western and Eastern which unite in the near-surface part.

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