Economic Insights

The future of the diamonds

The latter industry would be more significantly affected, not only Russia but also Belgium, which is the European center in terms of the marketing of diamonds.

Abel Amón. 08/09/2014

As reported last week the German daily Die Welt, the EU is preparing a new package of sanctions Russia would affect key industries such as the production of vodka caviar and diamonds.

The latter industry would be more significantly affected, not only Russia but also Belgium, which is the European center in terms of the marketing of diamonds. Possibly Russia would divert sales to new markets such as the United Arab Emirates, India and China 97% of the diamonds produced in Russia are under the supervision of the company Alsrosa, a Russian holding which occupies a leading position in the world of diamond production.

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97% of the diamonds produced in Russia oversees Alsrosa

The company is focused on the exploration, extraction, processing and sale of rough diamonds. The main activities are concentrated in Yakutia, (which is the coldest inhabited region in the world in winter with temperatures exceeding 60 degrees below zero) and in the Arkhangelsk region and Africa.

The participation of the company in the overall volume of diamond production is 27%. The company has proven reserves sufficient to maintain the current production level of at least 18-20 years. Probable reserves of Alrosa comprise about a third of total world diamond reserves.

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The cut of the diamond is what contributes to its shine

Russian rough diamond is considered to be the best diamond in terms of quality, structure, and material. This is exactly why two diamonds can have ideal cut and proportions, but a Russian cut diamond will have a better polish and shine than the other Ideal Cut Diamond. The cut of the diamond is what contributes to its sparkle, brilliance, and fire. A traditional round diamond has 58 facets with each cut being precise and defined. A diamond could not be as beautiful without this precision.

Other measures most talked against Russia’s actions in the Ukrainian conflict include the possible exclusion of the organization of the World Cup in 2018 should take place there as well as the exclusion of Russian banks information system and SWIFT international payments. This type of banking sanctions have been effective, for example in the case of Iran but the EU should measure the consequences much in those European companies that receive payments from Russian companies and for those who want to keep using Russian energy.

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