Why Russia sells its diamonds for nothing
There are not many countries in the world with large reserves of diamonds - the most precious and very demanded stones. But it is Russia that occupies one of the leading places in world diamond mining, since our country has the richest diamond deposits. However, for many years Russia has not reached such a level of development of the manufacturing industry that could turn it into a serious player in the global finished goods market. Therefore, the diamond industry in Russia is almost exclusively the extraction of diamonds with subsequent sale abroad.
The three companies have the strongest positions in the global diamond market - the Russian Alrosa, De Beers and Rio Tinto. These giants produce 70% of all diamonds, with Alros accounted for more than a quarter of world production - 28%. If you count by carats, then “Alrosa” generally leads, but De Beers overtakes the Russian company by profit. Alrosa is almost a monopolist in the Russian diamond mining industry. The company controls 95% of the country's diamond production. 33% of the company's shares belong to the federal center, another 25% to the government of the Republic of Sakha-Yakutia, where diamonds are mined, 8% are divided between the administrations of the districts of Yakutia, and the remaining 34% of Alrosa's shares are freely traded.
Almost half (45%) of the world's diamonds mined goes to the US markets, another 15% is consumed in China, 8% - in India. De Beers - the main competitor of Russia, and in the past - almost the monopolist of the global diamond mining industry, currently controls 38% of the planet’s diamond market. The company's mines are located in South Africa, African diamonds are valued more than Yakut diamonds, and efforts to mine them are less necessary - differences in climatic conditions affect.
One of Russia's main problems in the diamond market is its insignificant participation in manufacturing. Of the 14 diamonds entering the world market, 12 diamonds are processed in India - the world leader in the industry. Russia processes 3-4% of diamonds, which is simply an insignificant indicator for a country with such enormous diamond reserves. Recently, Alrosa seeks to work more actively with Asian markets, in which diamonds are in great demand. So, in 2016, the Eurasian Diamond Center was opened in Vladivostok, and in the fall of 2017, a cutting factory built by the Indian company KGK Diamonds began working there. But it would be time for our country to deal more closely with the issues of creating and developing its own cutting industry, since Russia could receive very good money from this production, because faceted diamond costs significantly more than “raw materials”.
It should be noted that some steps are already being taken for this, for example, Alrosa decided to supply rough diamonds weighing more than one carat, primarily to Russian cutting enterprises, which should push the industry towards further development. Of course, Russian enterprises are unlikely to become serious competitors to the Indian polishing industry in the near future, but the vector for their development has already been set. It remains for the state to create conditions - and economic, and political and legal - so that Russia could develop its own processing of diamonds, and not sell rough diamonds at cheap prices abroad.
The three companies have the strongest positions in the global diamond market - the Russian Alrosa, De Beers and Rio Tinto. These giants produce 70% of all diamonds, with Alros accounted for more than a quarter of world production - 28%. If you count by carats, then “Alrosa” generally leads, but De Beers overtakes the Russian company by profit. Alrosa is almost a monopolist in the Russian diamond mining industry. The company controls 95% of the country's diamond production. 33% of the company's shares belong to the federal center, another 25% to the government of the Republic of Sakha-Yakutia, where diamonds are mined, 8% are divided between the administrations of the districts of Yakutia, and the remaining 34% of Alrosa's shares are freely traded.
Almost half (45%) of the world's diamonds mined goes to the US markets, another 15% is consumed in China, 8% - in India. De Beers - the main competitor of Russia, and in the past - almost the monopolist of the global diamond mining industry, currently controls 38% of the planet’s diamond market. The company's mines are located in South Africa, African diamonds are valued more than Yakut diamonds, and efforts to mine them are less necessary - differences in climatic conditions affect.
One of Russia's main problems in the diamond market is its insignificant participation in manufacturing. Of the 14 diamonds entering the world market, 12 diamonds are processed in India - the world leader in the industry. Russia processes 3-4% of diamonds, which is simply an insignificant indicator for a country with such enormous diamond reserves. Recently, Alrosa seeks to work more actively with Asian markets, in which diamonds are in great demand. So, in 2016, the Eurasian Diamond Center was opened in Vladivostok, and in the fall of 2017, a cutting factory built by the Indian company KGK Diamonds began working there. But it would be time for our country to deal more closely with the issues of creating and developing its own cutting industry, since Russia could receive very good money from this production, because faceted diamond costs significantly more than “raw materials”.
It should be noted that some steps are already being taken for this, for example, Alrosa decided to supply rough diamonds weighing more than one carat, primarily to Russian cutting enterprises, which should push the industry towards further development. Of course, Russian enterprises are unlikely to become serious competitors to the Indian polishing industry in the near future, but the vector for their development has already been set. It remains for the state to create conditions - and economic, and political and legal - so that Russia could develop its own processing of diamonds, and not sell rough diamonds at cheap prices abroad.
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