Key points
- With Gokhran acting as a lifeline and new high-yield ore now being extracted, the company is positioning itself to remain a key player in the global diamond industry despite ongoing international sanctions and economic headwinds.
- Russian diamond giant Alrosa has commenced mining operations at the Karpinsky-2 kimberlite pipe, marking a significant expansion of its production at the Lomonosov deposit in the Arkhangelsk region.
- Still, the initiation of mining at Karpinsky-2 is expected to serve as a long-term investment in productivity, potentially helping the company navigate through geopolitical sanctions and global diamond market uncertainties.
Gems and Jewelry News: New Pipeline Breathes Life into Russia’s Diamond Ambitions
Russian diamond giant Alrosa has commenced mining operations at the Karpinsky-2 kimberlite pipe, marking a significant expansion of its production at the Lomonosov deposit in the Arkhangelsk region. This newly tapped pipe, estimated to hold more than 40 million tonnes of diamond-bearing ore, represents the third of six major kimberlite sources at the site. Alrosa first tested Karpinsky-2 in 2018 to assess its economic and industrial viability, and its inclusion now reinforces the company’s strategic response to shifting global market dynamics.
Rough Diamonds from Alrosa Mines
Image Credit: Alrosa
This Gems and Jewellery News report highlights how Alrosa’s subsidiary, Severalmaz, had already been operating two other pipes at the deposit—Arkhangelskaya and Karpinsky-1. Now, with Karpinsky-2 officially entering the mining phase, the state-run company is bolstering its long-term output capacity. Simultaneously, Alrosa CEO Pavel Marinychev noted that the company exceeded its ore production target at the nearby Severalmaz site during the first five months of the year, delivering over 1.2 million carats and improving processing efficiency to achieve a 9% production increase.
Strategic Shifts Amid Industry Challenges
The timing of this new pipeline comes as Alrosa suspends operations at four smaller, lower-margin mines—Zapolyarny, Magnitny, Khara-Mas, and Ochuos—amid a global industry slump. The decision reflects a broader effort to conserve resources and streamline operations during what Alrosa calls a “deep crisis” affecting the diamond trade. However, hope for liquidity remains alive as Russia’s state repository, Gokhran, has been authorized to purchase up to $985 million worth of Alrosa’s rough diamonds over the next three years.
Gokhran has historically served as a stabilizing force for Russia’s diamond industry, purchasing and stockpiling rough stones during market downturns and strategically releasing them when demand recovers—a role it played notably during the 2009 global financial crisis.
Financial Pressures and Forward Momentum
Despite these developments, Alrosa’s latest financial report reveals ongoing strain. In the first quarter ending March 31, the company saw a 42% year-on-year drop in revenue, down to RUB 58.13 billion (approximately $709.4 million). Net profit also took a hit, falling 29% to RUB 14.48 billion ($176.7 million). Still, the initiation of mining at Karpinsky-2 is expected to serve as a long-term investment in productivity, potentially helping the company navigate through geopolitical sanctions and global diamond market uncertainties.
The strategic expansion of mining operations at Lomonosov while reducing exposure to low-yield assets signals a measured and forward-looking approach from Alrosa. With Gokhran acting as a lifeline and new high-yield ore now being extracted, the company is positioning itself to remain a key player in the global diamond industry despite ongoing international sanctions and economic headwinds.
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