De Beers hopes to form a new marketing agreement with Russia's largest diamond producer Almazy Rossii-Sakha or Alrosa and is ready to provide loans to Russia's diamond industry, the company said last week. "Next year we hope to extend the agreement and expand the agreement which has in the past included credit arrangements, and I hope will do in the future," Managing Director Gary Ralfe said in a meeting of trade representatives. "It's a demonstration of close cooperation. It shows De Beers has deep pockets and is a good partner."
In July, Alrosa said it was considering ending its partnership with De Beers and competing head-to-head unless De Beers improved the terms of their agreement. With De Beers' latest announcement, Alrosa representatives say the company is serious and quite optimistic about relations with De Beers continuing. A major loan from De Beers would help Alrosa fund a $2.5 billion project to develop mines and infrastructure over the next five to seven years.
Russia currently supplies 26% of the diamonds sold through De Beers, and De Beers and Alrosa's three-year trade agreement ends next year.
- by Julia M. Duncan