Alrosa Reduces Output to Focus on Safety

RAPAPORT... Alrosa has lowered the production outlook for itsInternational mine from next year due to enhanced safety precautions following the Mir accident. "In our decision to reduce pace and output we were guided bynew, stricter rules governing health-and-safety system[s]," Alrosa CEO Sergey Ivanovsaid Wednesday. "Our employees' health and safety are an absolute priority forus." The miner has suspended all activity at International below 800 meters untilthe end of the year, after which it will carry out limited operations while itassesses whether the mine is dangerous. From 2019 to 2022, Alrosa expects to produce between 3 million and 3.2 million carats per year at the deposit, compared with about 3.7 million carats in 2017 and 2018. The company expects to resume full-capacity mining atInternational in 2023, though it is working to reduce that time frame. It hopes partially to compensate for the drop by increasing production at other mines. "This decision means changes in [the] sequence of mining andpreparing the ore body," said Igor Sobolev, Alrosa's first deputy CEO. "Now we arestarting [to] plan for the next years, during which we will consider the existingoptions to intensify production at other fields and balance the production plan." The precautions follow the 2017 flooding at Alrosa's Mirunderground mine - also part of the Mirny division - which killed eight workers. Atthe time, a commission determined that errors within the company had led to theincident. The miner has not changed its production estimate of 36.6million carats for 2018. The International mine had 51.3 million caratsin reserve at the beginning of 2018.