Alrosa could diversify into other mineral markets as it faces increasing pressure on its rough diamond sales, says the company’s new CEO.
Pavel Marinychev told the Almazny Krai TV channel he was also seeking to establish new sales channels to secure long-term growth.
The state-controlled Russian miner has been sanctioned by the US since the invasion of Ukraine – although the ban does not cover polished goods – and by a number of high-profile jewelry manufacturers.
Marinychev, who took over from Sergey Ivanov last month, acknowledged in the interview that banking restrictions were making it increasingly difficult to receive payments from rough diamond buyers.
He also said it was now impossible to import western machinery and spare parts for mining operations.
And he spoke of “certain negative market trends in the past month”.
Alrosa hasn’t published its rough or polished sales figures since January 2022 ($325m), but “sanctions” have had little impact, Ivanov told the Russian politics and business newspaper Kommersant last month.
He said it had seen no need to review its 2023 production forecast of up to 35m carats.
The company is, however, looking to its long-term future by considering strategic moves into other types of mineral resources and possibly into other sectors.
“Now we’re seeing a negative net debt,” Marinychev said. “If you balance our own money and funds that we will pay, we have more money than debt.
“We have a safety cushion to look around and understand what to do next in any circumstances, without making any sudden moves.”
He said the company was now exploring emerging markets that had not previously been seen as attractive propositions, but did not specify which they were.
Alrosa has previously expanded its operations beyond the diamond sector, but any successes have been short-lived.
It acquired gas assets in the Yamalo-Nenets Autonomous Region and in the Republic of Sakha in 2009 but auctioned them off in February 2018, declaring the move would allow it to to focus on diamond mining, which it said was its core business.
It also bought the rights to develop iron ore deposits – the Timir project in Eastern Siberia – in 2018.
Four years later it sold a 51 percent stake to Evraz, the country’s largest steelmaker, and it is reported to still be seeking a buyer for the remainder.
Marinychev said Alrosad could afford to diversify in a “calm and confident” fashion and would not be rushing into any new ventures.
This Blog was originally published on www.idexonline.com