OREANDA-NEWS ALROSA and the Ministry of Finance have signed an agreement to buy back part of the produced rough diamonds in 2024, two sources familiar with the situation told Interfax.

As part of this agreement, Gokhran purchased the first batch of diamonds from ALROSA in March this year, including the entire production section. It is assumed that such transactions will take place regularly this year.

Earlier, the same was reported by Rough&Polished with reference to a source.

The amount of this transaction is not specified. Gokhran operates within the budget limit for the purchase of precious metals and precious stones, which is 51.5 billion rubles for 2024.

It has not yet been possible to get a comment from the Ministry of Finance and ALROSA. The representative of Yakutia was also unable to comment on this issue (he controls 33% of ALROSA shares, revenues from the diamond miner form almost a third of the republic's budget).

Previously, Gokhran annually bought rough diamonds for $ 100-200 million, now deals will be concluded for a larger volume, one of the interlocutors of Interfax noted.

At the same time, according to him, we are not talking about a large-scale purchase of raw materials, similar to the 2009 operation. Then diamond sales stopped amid the financial and economic crisis, and Gokhran bought diamonds worth about $1 billion from ALROSA as an anti-crisis measure.

"Now it is one of the support tools during the sanctions. This will allow ALROSA to partially compensate for the loss of revenue due to the current chaos in the industry caused by the ban on Russian stones," the source explained to Interfax.

After the imposition of sanctions in early 2024, the participants of the market must prove the non-Russian origin of rough diamonds, while diamonds from different continents intended for sale in the G7 countries are sorted at the only control center in Antwerp, Belgium. The new rules have led to numerous problems with payments and logistics. Import procedures have slowed down even for diamonds obtained directly from African producers, according to an appeal from more than 100 Antwerp dealers, quoted by Reuters. Market participants said they expect new problems when additional requirements for tracking diamond products come into force on September 1.

The limit on purchases of Gokhran can be increased by law. In the first half of 2020, when diamond sales stopped during the pandemic, the state considered the proposal of the head of Yakutia to buy back ALROSA products in the amount of $500 million to $1.7 billion. The deal was agreed, but it was not required, as after the collapse, market demand recovered by the fall of 2020. Sergei Ivanov, who headed ALROSA at the time, noted that the sale price in Gokhran would have been lower than the market.

In January of this year, commenting on the issue of state support for ALROSA due to sanctions, Russian Deputy Finance Minister Alexei Moiseev said that such an option was not yet being considered. "There are no signs yet of what will be required. The company has a huge margin of safety, there is a negative net debt, and with a large margin," he said, adding that the company was ready for sanctions.