Alrosa Rough Diamond Sales Tumble 92.6% in First Quarter

Russian diamond mining firm Alrosa ended the first quarter with a net loss of 13.43 billion rubles ($432.52 million) as rough and polished diamond sales were slashed to just 4.87 billion rubles ($156.80 million), according to an earnings report. The sharp fall may indicate that Alrosa is not making any significant sales to Gokhran, the state repository.

The sales decline represents a 92.6 percent drop in rough diamond sales and a 76.7 percent fall in cut diamond sales compared to the first quarter of 2008.

Operating losses totaled 2.819 billion rubles ($90.76 million).

At the onset of the economic crisis, Alrosa announced that it would not curb production. Instead of selling the mined goods to traders and manufacturers, it moved to sell the rough diamonds to the state repository.

However, the low sales levels may indicate that Alrosa is not making any significant sales to Gokhran. Therefore, Alrosa has in fact cut back on production or is accumulating very high levels of rough diamond inventory.