Moscow, Russia – In a move suggesting Western sanctions may be impacting Russia’s diamond exports, the country’s finance ministry announced on Thursday that it will regularly purchase diamonds from Alrosa, a major producer currently under sanctions, through the state-owned Gokhran fund.
This decision comes after the EU and G7 countries implemented a phased ban on Russian diamonds, starting with direct imports in January and extending to stones originating from Russia via third countries from March onwards.
While Deputy Finance Minister Alexei Moiseev initially downplayed the impact of these sanctions, the recent confirmation of regular purchases by Gokhran indicates a potential shift in strategy.
The ministry has refrained from disclosing specific purchase amounts and volumes due to the sanctions imposed on Alrosa. However, it has stated that Gokhran will sell the acquired diamonds based on market conditions.
Alrosa, the world’s largest rough diamond producer by volume, has faced sanctions from both the United States and the EU in response to Russia’s actions in Ukraine. The company has ceased publishing sales data since the conflict began.
Prior to the sanctions, Alrosa’s major customers included Belgium, India, and the United Arab Emirates. In 2023, India emerged as the largest buyer of Russian diamonds, with significant supplies also going to Belgium, Hong Kong, and Armenia.
Despite a slight decrease in output in 2023, Alrosa’s revenue has increased, suggesting that the company is finding ways to adapt to the sanctions regime.
The extent to which Russia’s diamond purchases through Gokhran will mitigate the impact of Western sanctions remains to be seen. However, this development highlights the ongoing economic maneuvering between Russia and the West in the wake of the Ukraine conflict.
