The story
History
The history of Alrosa dates back to 1954, when the first primary deposit of diamonds in the Soviet Union, the kimberlite pipe Zarnitsa, was found. In 1955 the Mir kimberlite pipe and the Udachnaya pipe were discovered. A total of fifteen primary diamond sources were found in 1955.
In 1957, a decision was made to begin mining and production operations on alluvial and ore deposits in Yakutia. To manage the facility's construction and subsequent operations, the Yakutalmaz group of companies was established with headquarters in Mirny. The first commercial-grade diamonds were recovered the same year. Two years later, the Soviet Union sold the first shipment of diamonds on the world market.
For the most part during the Soviet period, the diamond mining industry developed on the basis of the Mir open-pit mine and adjacent alluvial deposits. In those years its main open-pit mines, processing plants and related energy generating facilities were put into operation. In 1960, the Djomolungma and Chimyan was discovered, and in 1969, the International kimberlite pipe.
In 1963, the first sales contracts between the USSR and De Beers group were signed. In 2009 this cooperation was brought to an end as contrary to European Union competition laws in compliance with a decision of the European Commission. Now Alrosa independently distributes its rough diamond production on the world market.
Through 1980, the rapid development of primary deposits continued in Aykhal township on the basis of the Jubilee pipe and in Udachny town. Today the Udachny open-pit mine is one of the largest open-pit mines in the world.
Because the Soviet Union was very heavily indebted in the late 1980s, Viktor Vladimirivich Gerashchenko and six others travelled among Saudi Arabia, United Arab Emirates, and others from September 1990 until the afternoon of 17 January 1991 to obtain very large loans from Persian Gulf states to prevent the collapse of the Soviet banking system. However, Gerashenko could not obtain loans but Yevgeny Primakov and Thomas Alibegov did obtain loans but not enough so schemes involving diamond trades would be pursued to obtain additional credits. Using uncut diamonds for loans was not as profitable as using cut gems and the Soviet and later Russia friendly expert who cuts and polishes the gems is Lev Leviev of Africa Israel Investments (AFI).
Alrosa closed joint-stock company was set up according to Presidential Decree №158C of the President of Russia "On the Establishment of the Almazy Rossii-Sakha Joint Stock Company" signed on 19 February 1992, based on NPO Yakutalmaz, a former USSR state-owned diamond mining company.
In 1997, Alrosa started sponsoring the Russian submarine B-871, named "Alrosa" since 2004.
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This serves the goals of both upholding the Russian Navy and providing Yakutian youths a military alternative to crime, drugs and alcoholism.
In 2008, Alrosa acquired a license to mine, process and store uranium.
In 2009, it partnered with Rosatom, the nuclear state company of Russia.
In 2011, Alrosa was reorganized as an open joint-stock company with free float of Alrosa's shares on financial markets.
In July 2007, Verkhne-Munskoye diamond field in Yakutia was discovered with an estimated value of about $3.5 billion.
In August 2009, after the 2008 financial crisis, Prime Minister Vladimir Putin announced the Russian government, via Gokhran, would buy $1 billion in uncut diamonds from Alrosa. This was to support the Russian diamond mining industry while avoiding saturation in the global diamond market and thus further depression of diamond prices. The diamond mining industry is critical to the Yakutia economy.
On 28 October 2013, the company carried out the IPO. The Russian government and the Republic of Sakha (Yakutia) sold a combined 14% stake (in equal shares), while Alrosa offered about 2% in treasury stock. U.S. investors were the biggest buyers of the shares, purchasing up to 60% of the stake, 24% got European investors, Russian investors accounted for about 14%. Investment funds Oppenheimer Funds Inc. and Lazard Ltd. took part in the IPO and bought over 2% of the stake. Alrosa raised $1.3 billion in share sales.
In 2016, Alrosa was ranked as being among the 12th best of 92 oil, gas, and mining companies on indigenous rights in the Arctic.
In 2017, ALROSA implemented over 500 social and charitable initiatives. Over 70% of all initiatives were implemented in Yakutia – ALROSA's key region where the company conducts its core business. These initiatives are partially implemented through nonprofit organization "Target Fund for Future Generations of the Republic of Sakha (Yakutia)", in which the company has invested over 4.5 bln rubles for the whole period of cooperation since 2011. That year, ALROSA was ranked among the top three in the environmental responsibility rating of the Russian mining and smelting companies. The rating was developed by the World Wildlife Fund, United Nations Development Programme, Global Environment Facility, and the Ministry of Natural Resources and Environment of the Russian Federation.
In June 2017, Memorandum of Cooperation between PJSC ALROSA and Gem & Jewelry Export Promotion Council (GJEPC) was signed in the scope of India-Russia Summit with the participation of the Russian President Vladimir Putin and Indian Prime Minister Narendra Modi.
In June 2017, ALROSA entered Top-5 of companies with sustainable development, according to "Polar Index". “Polar Index” is the first and only specialized rating in Russia of companies whose geography of activities affects the Arctic zone of Russia.
According to the results of the research conducted by PwC in 2017, ALROSA is an absolute leader among diamond mining companies in terms of investments in social programs directing to social spending on average 2.8% of its revenue (while the respective average level for other participants of the rating is about 0.5%).
In January 2018, ALROSA was ranked 10th among corporations in Russia in terms of corporate transparence with an index of 6.0 out of a maximum of 10.0 (with the overall index for Russia being 2.6), according to the study "Transparency in Corporate Reporting", prepared by Transparency International - Russia.
In 2021, ALROSA was ranked no. 53 in the Arctic Environmental Responsibility Index (AERI) that covers 120 oil, gas, and mining companies involved in resource extraction north of the Arctic Circle. In 2021, the company's revenue in Russia amounted to 262 billion rubles.
Sanctions
In 2022, in response to Russia's invasion of Ukraine, several countries moved to implement economic sanctions against several Russian-based companies, individuals and financial institutions. On February 24, 2022, US President Joe Biden announced sanctions against Alrosa.
However, the diamond-cutting companies of Antwerp, Belgium, keep importing from Alrosa although at lower volume.
On January 3, 2024, the European Union imposed sanctions on Alrosa, and its CEO, Pavel Marinychev, as part of its "unwavering commitment" to Ukraine in the conflict against Russia. Alrosa, responsible for approximately 90% of Russia's diamond production, saw its assets in Europe frozen, with EU citizens and companies prohibited from providing funds to the company. Pavel Marinychev, faced a travel ban in Europe. This move followed the EU's earlier prohibition, effective from January 1, 2024 on the import, purchase, or transfer of Russian non-industrial natural and synthetic diamonds and diamond jewelry.
2017 Pink Diamond find
On 21 September 2017, TASS news agency reported Alrosa's most expensive gem to date, a 28.65 carat pink diamond. The largest pink diamond previously mined by Alrosa weighed 3.86 carats, one of a total of only three others that the company has mined of over two carats each during the past eight years. The gem is reported to be of jewelry quality, measuring 22.47 x 15.69 x 10.9 millimetres, with a saturated pink tone and practically no defects, according to Alrosa. The pink diamond was mined by subsidiary Almazy Anabara, which operates the Severalmaz kimberlite pipes and placer deposits near riverways in the northwest part of Yakutia.
From Wikipedia’s article on Alrosa, shared under CC BY-SA 4.0.5