Russia Curbs Open Rough Market, Introduces 8% Export Duty on Diamonds

(IDEX Online) - Russia is replacing its largely commercial rough-diamond sales model with a regulated group of approved cutters that will effectively avoid a new 8% export duty on rough and partially processed diamonds.

The move ties access to cheap stones to membership of a state-managed cluster spanning the Republic of Sakha (Yakutia) and the Smolensk region, the country's main diamond-producing areas.

The shift marks a decisive move away from the traditional system in which Alrosa and its trading arms negotiated long-term contracts and sight-like arrangements with cutters and traders in major hubs.

The formation of what is described as the largest cluster of diamond-cutting facilities in Europe was announced on 6 August, after President Vladimir Putin signed a decree.

Mining companies, primarily state-controlled Alrosa, must first offer their rough and partially processed diamonds to cutters within the cluster before selling elsewhere.

On 18 August, RBC reported that the Finance Ministry had delayed the 8% duty - originally due 1 September 2026 - to 1 March 2027, the same day the cluster decree takes effect, so the two measures launch together as a "comprehensive program" for the cutting industry.

The duty will apply to virtually all commercially significant rough and partially processed diamonds (from 0.45-carat upward, including special sizes over 10.8-carat) exported beyond the Eurasian Economic Union (EAEU), a Russia-led bloc of five post-Soviet states (Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan).

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