Editor’s Note
This article examines the commercial challenges facing Russia’s diamond industry following a record gemstone discovery, highlighting how geopolitical tensions can complicate even the most significant natural resource finds.
A Russian diamond producer is celebrating a new gemstone discovery. However, in the context of the Ukraine war, the question arises: Can it be easily monetized?
In Mirny, Russia, a record diamond has been found – but will it be sold quickly during the Ukraine war? The Russian corporate group Alrosa stated in a release on Sunday (September 10) that the gemstone is surrounded by a yellowish-brown “halo.” The rough diamond weighs 390.7 carats.
The record diamond was mined in a mine in the Siberian region of Yakutia. Alrosa has its corporate headquarters in the city of Mirny there. It is reportedly the largest gem-quality diamond mined in Russia in about a decade.
However, sanctions against Russia under President Vladimir Putin could complicate the sale. Among others, the US news agency Bloomberg reported on this.
The state-controlled Alrosa is under sanctions from the USA and Great Britain due to Putin’s war of aggression against Ukraine. While there are no EU sanctions against the Russian diamond industry yet, Bloomberg reported on speculation that the G7 states could announce further sanctions this very month.
According to Bloomberg information, attempts to stop the sale of Russian gemstones in the EU are meeting resistance from importing countries like Belgium. Their argument: The trade would simply be relocated elsewhere. According to Bloomberg, Alrosa suffered a sales slump after the initial announcement of US sanctions but has since recovered, partly through increased trade in Asia.
Since the Russian attack on Ukraine, the 27 EU states have enacted eleven sanctions packages. The measures aim to weaken Russia’s economy and restrict its ability to wage war. In addition to economic and financial sanctions, they include punitive measures against around 1800 individuals and organizations. Alrosa is one of the world’s leading diamond producers. According to Alrosa, the manufacturer accounts for 90 percent of Russian and 29 percent of global diamond production.