Russia’s Alrosa (MCX: ALRS), the world’s top diamond producer by output, is temporarily suspending production at two assets as demand and sales for diamonds continues to drop.
Major consumers, including China and the United States, are struggling with economic headwinds caused by the global covid-19 pandemic. Extended lockdowns affecting key players in the supply chain, including polishers and top retailers, has only made things worse.
Suspension affects Aikhal underground mine and Zarya open pit, which account for roughly 7% of the company’s diamond output.
The Russian state-controlled miner said the dire state of
the market would force it halt its Aikhal underground mine and Zarya open pit
from May 15 to Sep.30 and to Dec. 30, respectively.
The two assets account for roughly 7% of the company’s
diamond output in carat terms. They produced 2.6 million carats of rough
diamonds last year.
Personnel of suspended operations and auxiliary services
will be partially laid-off, Alrosa said. The remaining employees will be
transferred to other assets or stay to keep up maintenance work at the idled
operations.
The diamond giant said
in March it may revise down its output guidance for 2020, which currently
sits at 34.2 million carats. In 2019, it produced 38.5 million carats.