Russia to Create "Europe's Largest Diamond Cutting Cluster"

(IDEX Online) - Russia is to create what it describes as the largest cluster of diamond-cutting facilities in Europe, in a move aimed at retaining more value from its stones.

The cluster will combine Alrosa's Kristall cutting plant in Smolensk with facilities in the Republic of Sakha (Yakutia), Russia's main diamond-producing region.

President Vladimir Putin formalized the plan in an executive order signed August 6.

The Kremlin said the measure was intended "to promote the development of the diamond cutting industry in the Russian Federation," with the cluster scheduled to begin operating under the decree on March 1, 2027.

The cluster seeks to shift Russia further from exporting mainly rough diamonds toward a more integrated domestic industry spanning rough supply, cutting, polishing and jewelry production.

Pavel Marinychev, CEO of Alrosa, the state-controlled diamond miner, told Putin participants would have access to rough diamonds "along with preferential pricing," provided that "all of the rough stones allocated to them are cut and polished within the cluster".

The timing of the move reflects pressure on Russia's diamond sector. Marinychev told Putin that "the global diamond industry is currently experiencing the deepest sectoral crisis in its entire history" and that Alrosa and other Russian companies were operating under sanctions.

In a separate move, Russia is imposing an 8% export duty on some rough diamonds is due to take effect on September 1, aimed at further encouraging domestic processing.

Pic, courtesy The Kremlin, shows Pavel Marinychev, Alrosa, meeting Russia's President Vladimir Putin on 6 August.