Alrosa humbles De Beers

In 2009, the Russian diamond mining company, Alrosa, overtook the South African diamond giant, De Beers, as the largest producer of rough diamonds. This is a historic achievement because, for most of the 20th century, De Beers dominated the diamond trade as the largest producer of roughs.

Alrosa produced 34 million carats of rough diamonds in 2009, which was a tumultuous year for the global diamond industry because of the economic slump. De Beers, on the other hand, produced 24.6 million carats in the same year. This was almost half its 2008 production.

“In spite of the recession, Alrosa managed to preserve jobs and maintain its production levels, and produced 34 million carats of rough diamonds in 2009. This enabled the company to rank first (in volumes) in diamond production,” the company said in a statement.

Alrosa’s rise to the first rank ahead of De Beers has been welcomed by diamond traders of Surat where seven out of 10 diamond roughs of the world are cut and polished.

“This is a positive development for our industry as it reduces our dependence on Dee Beers,” said Rohit Mehta, president of Surat Diamond Association. “Alrosa is aware of Surat’s pre-eminent position in diamond cutting and polishing. It has recently signed agreements with three Indian companies to supply rough diamonds worth US$490 million over a period of three years.”

Alrosa was able to achieve this feat mainly because of the vastly different strategies adopted by the two companies. While De Beers shut down many of its mines and cut production in the wake of the slump in demand, Alrosa maintained the same production levels as in the previous years.

De Beers, though, remains ahead of Alrosa in rough sales, value-wise. De Beers sold rough-diamonds worth US $3.24 billion during 2009, while Alrosa’s sales were worth $ 2.21 billion, half of which were sold to the state repository, Gokhran.