December 17, 2001
De Beers Contract with Russia's Alrosa Signed
De Beers signed its $4 billion five-year trade agreement with Alrosa, the Russian diamond producer. The agreement will provide De Beers with fewer diamonds than the previous pact with Alrosa, which parceled out $3.5 billion over four years. The $800 million in diamonds De Beers will sell per year represents 50% of the total Russian production; the other half will support Russia's growing cutting industry.
Alrosa plans to use the contract to raise capital to fund its planned redevelopment and expansion of its diamond mines.
Speaking in Yakutsk, the Deputy Prime Minister of Russia and Minister of Finance Alexei Kudrin welcomed the agreement on behalf of his Government. "Russia supports the continuation of the trading relationship between Alrosa and De Beers which will be of great benefit to the Russian diamond industry in particular, and to the Russian economy in general," he says. "It should also contribute to increased investor confidence in the Russian Federation."
Vyacheslav Shtyrov, president of Alrosa, also welcomes the agreement and stresses its importance to the financial stability and economic development of the Republic of Sakha, where the diamonds are mined. "It will provide Alrosa with guaranteed hard-currency revenue, the security to obtain credit from western financial institutions and give Alrosa access to De Beers' technical expertise in underground mining," he says. "All this will help Alrosa maintain and increase its production in the years ahead."
by Peggy Jo Donahue