RUSSIAN DIAMOND GIANT PLEDGES FURTHER INVESTMENT INTO ARMENIA’S AILING DIAMOND INDUSTRY
by Natalia Leshchenko
Global Insight
December 24, 2007
The chairman of Russia’s ALROSA diamond mining monopoly, Sergey
Vubornov, visited Armenia where he spoke to the country’s president
Robert Kocharian about the progress on the implementation of the August
2006 agreement aimed to resume the deliveries of Russian rough diamonds
for Armenia’s diamond-cutting companies. Vubornov told journalists
that ALROSA had already supplied four Armenian companies with $1US
million-worth of uncut diamonds, having chosen the companies from
22 that had applied for cooperation. ALROSA’s plans to increase the
deliveries to the volume of $28US million in 2008, further raising
it in 2009, Vubornov said.
Significance:The resumption of diamond delivery is a matter of vital
importance for Armenia’s diamond-cutting industry. Cut diamonds, once
Armenia’s biggest export item, have dropped to represent less than 1%
of the country’s GDP in 2007 since a major slump in resource delivery
in 2004. Russian ALROSA is in a winning position here: it does not
cut small diamonds, the main specialisation of Armenia’s jewellers,
itself and hence has no problem outsourcing this to Armenia; also,
the need for diamond materials makes the Armenian government pliable
to ALROSA’s interests, and the recent meeting is said to have opened
a green light to the company’s expansion into other sectors of the
Armenian economy. Although no official information has been issued,
Radio Liberty suggests this may pertain to exploration of the country’s
gold resources. The rejuvenation of the diamond-cutting industry will
give credit to Armenian government ahead of the presidential election,
although the further expansion of the Russian business in the Armenian
economy may prove alarming to other foreign investors.