Alrosa Inching Closer to Sight System

A quietly posted press release on Alrosa’s web site serves as a reminder of the Russian diamond mining giant’s slow forward advance toward the establishment of a ‘Sight’ system – a fixed list of clients committed to purchasing large quantities of rough diamonds.

The Friday release announces that by October 1, current clients must be “brought in line with the recently adopted internal regulation,” to receive a local or “external” (i.e. international) diamond allocation. Alrosa President Sergey Vybornov issued the order, the announcement adds.

A lot of diamonds were sold in Moscow since Alrosa first announced its intention to change the way it sells rough diamonds. Last year, Vybornov told IDEX Online that come December, as some contractual agreements end, the new system will be in place.

A number of very large diamond companies were apparently approached by Alrosa and invited to apply for an allocation under the new system. The short list includes the largest firms in Antwerp and at least one Mumbai-headquartered firm. All repeatedly noted that they are getting conflicting messages from Moscow, and that they are pretty much in the dark as to what will happen and when.

December came and passed, but as these firms tried to get more information from Vybornov and long-time Vice President Sergey Oulin (appointed to oversee all of Alrosa’s activities related to rough diamond sales, sorting and purchases), the company may have run into its own snags.

Whatever caused the delays, the energetic Vybornov is pushing forward a number of initiatives, not the least of them a new council of top industry decision makers that already decided to invest in generic diamond jewelry marketing.

In another reminder of the De Beers way of selecting clients, Alrosa is asking its buyers to supply it with information on shareholders, management and other members of the group, “including the ultimate beneficiary,” as the release reads.

Recent talk in the market is that Alrosa is currently consulting with stakeholders on the final form of the system. If the October deadline is a clue, the system may finally be in place sometime in mid-2009, just as it stops selling goods to De Beers’ Diamond Trading Company (DTC).