ALROSA DIAMONDS TO BE MANUFACTURED IN ARMENIAN JOINT VENTURE

Tacy, Israel
June 24 2007

Armenia’s diamond manufacturing industry will soon benefit from
Alrosa’s rough diamonds. Russian mining company Alrosa is expecting
to establish a diamond manufacturing joint venture in Armenia with
local diamond manufacturer DCA. According to Russian media sources,
the Russian rough, the first shipment of which is planned for as early
as this autumn, will be cut and polished at the Alrosa-DCA joint
venture, but other Armenian companies under DCA patronage may also
receive some of the diamonds for further processing. The diamonds
will then be sold in the Russian market.

Alrosa President Sergey Vybornov is expected to sign the joint venture
agreement during his upcoming visit to Yerevan. Sources say that a
final agreement concerning the joint venture was already reached in
Moscow. In addition to talks of the venture, DCA Chairman and Chair
of the International Association of Armenian Jewelers Gagik Abramyan,
Armenian Ambassador to Russia Armen Smbatyan and Alrosa delegations
also discussed the jewelry industry in Armenia and ways to develop it.

Cooperation between Russia and Armenia will benefit both countries,
sources say, as processing of Russia’s diamonds, especially small
ones less than one carat, is more profitable in Armenia than in
Russia. Moreover, with manufacturing prices increasing in India and
China, where Alrosa currently sells its diamonds to and then buys
the finished products from, Armenia is a good alternative.