Alrosa Revenue Falls Amid Lower Supply

RAPAPORT... Alrosa's sales dropped in the second quarter as the closure of theMir underground mine resulted in a lower supply of rough diamonds. Revenue from rough stones declined 7% to $1.06 billion forthe three months ending June 30, the Russian miner said Monday. By volume,sales fell 12% to 9 million carats as the average price of gem-quality diamondsgrew 18% to $164 per carat, reflecting a shift to higher-value goods. Sales ofgem-quality rough slid 22% to 6.3 million carats. Alrosa's production fell 18% year on year to 8.5 millioncarats during the quarter, after a fatal flood at the Mir mine in August 2017forced the company to suspend the operation. The processing of lower-grade orefrom the Jubilee pipe and Aikhal assets, as well as the recovery of lowerdiamond grades from Alrosa's International mine, also impacted output. Alrosa has used some of its inventory over the past year tooffset the lower production. As a result, stock levels have fallen 23% to 11million carats as of June 30 compared with a year earlier. Alrosa maintained its forecast of an 8% decline inproduction to 36.6 million carats this year, compared with 39.6 million caratslast year. The company's polished-diamond sales climbed 15% to $26.2million in the second quarter. Image: Alrosa