De Beers’ new deal on Russian diamonds stalled

Diamond giant De Beers said on Monday the future of its cooperation agreement with Russian miner Alrosa had not yet been finalized, but expected the current deal to stay in place until a new one was signed, Reuters reports.

A De Beers spokesman said in London a deal on marketing diamonds from Alrosa (Almazy Rosii-Sakha) would need approval from Russia’s Far Eastern republic of Sakha, where presidential elections are scheduled for December 23-shortly before the current marketing deal expires.

The current deal expires on December 31, but De Beers expected current cooperation would continue for the time being, as it had during a hiatus in 1995-1998, Reuters reports.

“It is likely that the current contract will run until the impasse is overcome,” the spokesman said, adding that De Beers could not give details of any deal until one had been signed, Reuters reports.

Alrosa and De Beers have a three-year marketing agreement in place under which Alrosa must sell at least $550 million worth of uncut diamonds to De Beers, but not more than 26% of De Beers’ sales.

Alrosa has been keen to expand its production of rough diamonds as well as boost its diamond-cutting operations.

The De Beers spokesman said a deal would also need approval from the European Union, which is looking into the diamond giant’s marketing plans and deals with other producers, Reuters reports.