Russian firm ready to cut De Beers sales

Russian diamond mining company Alrosa is prepared to reduce diamond sales to De Beers, the world’s leading diamond producer, by 25% to address antitrust concerns, an Alrosa executive said Friday, Feb. 7.

The announcement came after the European Commission said in January that a multibillion dollar deal between Alrosa and De Beers restricts fair competition and breaks antitrust rules, The Associated Press reports. The commission requested Russia cut deliveries and gave the companies two months to respond.

Under the agreement, signed in December 2001, Alrosa pledged to sell $4 billion of diamonds to De Beers over a five-year period, equivalent to about half its annual production, the AP reports.

By agreeing to cut sales by 25%, Alrosa would lose $600 million in potential profits, said Sergei Ulin, the company’s vice president, the Interfax news agency reported.

State-owned Alrosa is Russia’s only diamond mining company and the world’s second-largest rough diamond producer, after De Beers. De Beers, an Anglo-South African concern, controls about 60% of the world’s rough diamond supplies and produces 43 percent of world output.

Alrosa also announced plans to sell diamonds jointly with an Angolan state-run diamond company, Interfax reported. Alrosa holds a 32.8% stake in Angola’s Catoca diamond refinery and plans to acquire a 20 percent stake in a project to develop two Angolan mines.

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