Fancy Color Diamonds Highlight Alrosa Hong Kong Tender
November 24, 2015
The company, which mines and markets some 90% of Russia’s diamond production, offered polished stones larger than 5 carats and fancy colored diamonds at the Hong Kong auction. The highlights were a 54.2 carat (ct.) Fancy Deep yellow cut-corner rectangle and a 0.42 ct. Fancy Vivid purple pink. The large yellow had a minimum offer price of $1.5 million, according to Alrosa, and the purple-pink diamond had a per carat reserve of “more than $1.6 million,” one trader said.
Officials from Alrosa said both diamonds were mined in the Archangel region near the country’s border with Finland, some 2,600 miles west of Russia’s traditional diamond producing area of Mirny in Siberia. The Archangel operation, mined by a subsidiary named Severalmaz, is relatively new. It began production at the Lomonosov pipe in a small way in 2005, but a 2014 upgrade quadrupled its capacity to 1.4 million carats yearly. Another nearby pipe, Karpinskogo, also came on line last year, producing 266,000 carats, including fancy colored diamonds.
This 0.42 ct. Fancy Vivid purple pink diamond offered at the September Alrosa diamond tender was mined at Lomonosov pipe in the extreme northwestern portion of Russia. It was expected to sell for more than $1.6 million per carat. Photo by Russell Shor/GIA
Alrosa officials said most of the diamonds at the sale had solid offers − in contrast to the slow business of the trade show happening in the convention hall several floors below. Alrosa has been running invitation-only tender auctions in tandem with the September Hong Kong Gem and Jewellery Fair, the largest single gathering of diamond traders in the world, since 2007. Last year, the company’s Hong Kong sales totaled $43.2 million, which also included on-going sales of rough and commercial sized polished diamonds.Alrosa surpassed De Beers as the world’s largest diamond source five years ago and sells the vast majority of its production – 38 million carats last year – in regular sales similar to De Beers’ sights. In addition to its Hong Kong tenders, the company also offers large rough diamonds – 10.8 carats and above − via periodic online auctions.
De Beers remains the leader in value, however, logging rough diamond sales of $7.1 billion in 2014 (on 32.7 million carats) compared to Alrosa’s $3.7 billion.
Alrosa’s third quarter sales fell dramatically from $1 billion in last year’s June-September period to $563 million this year. Prices fell 8% to 10% on average during that same period. Its sales volume plunged from 7.6 million carats in the third quarter of 2014, to 4.9 million carats, according to an Alrosa statement. By comparison, De Beers said it sold 14 million carats during the first half of the year, a 26% decline from the same period of 2014.
In the first half of the year, Alrosa sold just over $232 million to Gokhran, the Russian government stockpiling agency, instead of selling into the difficult diamond market. Gokhran holds periodic auctions of its diamond stocks and 2015 sales have been running 45% below last year’s levels. The country’s Ministry of Finance estimates a year-end total of $66 million, compared to $102 million last year.
About the Author
Russell Shor is senior industry analyst at GIA in Carlsbad.
