India Largest Diamond Cutting Center in the World: Jim Vimadalal, Director, ALROSA Indian Representative Office speaks with Mines to Market on ALROSA’s objectives to strengthen ties with Indian Market.
What are your plans to step up the supply chain in India? Do you think Indian mfg? can play the major role for Alrosa in Consumption of rough diamond & how do you see them buying more Alrosa rough then others?
ALROSA has a longstanding and successful relationship with India, especially with its industry organizations. In particular, the company has a Memorandum of Cooperation with the GJEPC, which includes many important issues – for example, support of the SNZ work and the discussion on trade within that zone. It also includes measures to counter the penetration of synthetic stones to the market, which is one of the most important topics for the industry.
Being the largest diamond cutting center in the world, India is very important for ALROSA. The company has recently opened a representative office for closer contact with local clients, trade organizations and for a better understanding of the local market, which is quite a prospective site for diamond jewelry consumption. Moreover, India has a long tradition of wearing jewelry and a growing middle class.
Last year, ALROSA directly sold to Indian companies rough diamonds worth about $700 million, which represents 16% of the company’s total sales. There are also purchases of companies with Indian capital, registered in other countries. The company don’t have any specific plans to increase this share, because it needs to keep the balanced sales system. At the same time, the company is very interested in expanding its presence in India, forming a list of reliable clients and partners.
Would Alrosa offer rough to its domestic clients within BDB?
The company already sells its products (rough diamonds up to 10 carats) within the special notified zone in BDB and is open to all the clients. The members of BDB have equal rights, as well as the opportunity to participate in ALROSA’s tenders there. The company with great pleasure organizes the viewings but warns the buyers that they need to apply in advance.
What is your opinion about the diamond lab certificate and when diamonds sell how would customers know its origin?
Nowadays, many companies are thinking about how to inform the end consumer about the diamond’s origin. Many of them are implementing some new technologies and tracing is one of them. Being the world leader in diamond mining, ALROSA is no exception and strives to provide the consumer with full guarantees of the authenticity for its diamonds and tell them the story of their origin.
Such information is in demand today and it is important to give not just a very detailed data, but make it interesting and understandable. Therefore, the company is now looking at different systems that are being developed in the market to come up with the most acceptable solution.
The core idea is full transparency. It is a way to guarantee the naturalness of the diamond, to get information about its origin.
For client information, which mines are the rough comings from?
ALROSA has 8 open-pits, 3 underground mines, and several alluvial deposits. There are 6 open-pit mines in Yakutia: Nyurbinsky, Botuobinsky, Jubilee, Komsomolskaya, Zarnitsa and Zarya, and two in the Arkhangelsk region: Arkhangelskaya and Karpinskogo-1.Underground mines: Aikhal, International, and Udachny.
Several alluvial mines are also operated by ALROSA’s subsidiary AlmazyAnabara.
There are also alluvials in the region of Mirny, Udachny, and Nyurba.
How would Alrosa take the challenge of synthetic &man made diamonds especially when DTC has launched lightbox jewellery?
ALROSA hopes that this initiative will serve to differentiate natural diamonds and synthetic stones and emphasize the status of synthetics as a separate niche cheap product. The company believes that it will take several years for the market to see the effect from that initiative, and the impact has yet to be assessed.
However, it can’t be ruled out that this project may potentially increase the demand for synthetics. There is also a risk that the core ideas of natural diamond, such as rarity, value, and deep emotional meaning, maybe devaluated, especially in cheaper categories.
Therefore, it is necessary to differentiate these products and actively develop this work. As the synthetics become more accessible, it will be necessary to explain intensively the difference between these stones and real diamonds. The industry should inform consumers that natural stone carries value and emotional meaning, it is unique and inimitable, and lab-grown diamonds will never become a luxury product and won’t be able to replace the natural rough stones. ALROSA hopes that DPA will focus its work on those issues.
What would be your projections for the coming quarter? How does Alrosa project rough prices in the coming months & how does it play a major role in rough price stabilization?
Given a rather positive beginning for the year, ALROSA expects a stable demand for rough diamonds of all categories in the near future. Some normal seasonal fluctuations are possible. The world supply will be stable as well, and therefore, there are no reasons for price volatility.
Overall, ALROSA’s forecast on the global diamond market is moderately positive. There are some fundamental factors influencing the global market. According to experts, the global volume of supply will not increase, because the existing deposits of all companies are gradually exhausting with only a few large discoveries over the past decade. Demand for diamond jewellery, according to expert estimations, will grow by 1-4% per year driven by the US, China, and India. In addition, the recent researches show that the consumers are still interested in buying diamonds.