Production growth and new project investments predict further expansion of the diamond sector.
Russia is the world’s biggest diamond producing country. Its diamonds stand for 22 percent of the world’s total diamond production. Russia’s primary diamond reserves are located in Yakutia, but parts of them can be found also in the Barents Region.
The Barents diamonds come from Arkhangelsk Oblast. It is one of the three northernmost locations in the world where diamonds are extracted (along with Yakutia and Canada).
Production in Arkhangelsk Oblast is operated by one of the youngest mining enterprises in Russia, the OJSC Severalmaz (“North diamond”). The company was established in 1992 to develop the Lomonosov field. 95 percent of the company’s stock is owned by ALROSA. Commercial production began in 2006, and has since had an annual production capacity of about 500 thousand carats.
Diamond production booms
Production at the Lomonosov field has boomed, figures from Patchwork Barents show. In 2009, Severalmaz extracted 455 thousand carats of diamonds. By 2013, production had reached 636 thousand carats (an increase of 40 percent).
Today, the Severalmaz diamonds account for about two percent of ALROSA’s production. By 2020, the share is expected to reach 10 percent.
A “brilliant” future for Arkhangelsk
The demand for Russian diamonds is high, particularly abroad. About 75 percent of the output is exported, while the rest goes to the domestic market, the Voice of Russia reports. The largest consumer of Russian diamonds is the United States. Diamonds are particularly popular there, and are mainly used in the jewellery industry.
The demand for Russian diamonds also impacts production in Arkhangelsk Oblast. Over 60 percent of all diamonds produced by Severalmaz can be used in jewellery and are, thus, qualified for export. In 2007, Severalmaz was granted general licence for the export of diamonds. By the first quarter of 2014, all diamonds produced in Arkhangelsk were subject to export, Business Class informs. The primary consumers of the Arkhangelsk diamonds were Belgium, India and Israel.
In March 2014, Severalmaz opened its second processing plant. The new module will significantly enhance output at the Lomonosov field, ALROSA reports.
New project investors aim to further expand production in the region. Lukoil plans to open a new diamond mine at the Grib field in June 2014, Arctic Info reports. “The first diamonds will meet the markets in August-September [this year]”, says the President of Lukoil, Vagit Alekperov to Arctic Info.
According to RIA Novosti, Severalmaz will continue to increase its production. By the end of 2014, the company expects to produce 1,7 million carats of diamonds, which is more than double of the amount produced in 2013.
Open-pit: The Arkhangelskaya pipe is 23 km deep. This is where the Barents diamonds first see daylight. (Photo: ALROSA)