ARMENIA NEGOTIATING WITH RUSSIA TO OPEN DIAMOND EXCHANGE

IDEX Online
Dec 29 2009

The Armenian government is in negotiations with Russia to receive
a $100 million loan to be used exclusively for the development of
a jewelry business within Armenia, the US-based Ashbarez newspaper
reported Monday.

Armenian Prime Minister Tigran Sargsyan said the loan will fund the
opening of a diamond exchange that will be used to supply Russian
diamonds to jewelry factories in Armenia.

"If the negotiations are successful and we manage to come to an
agreement with Russia-based Alrosa company, then the attracted loan
will be used to develop the diamond cutting sector and to establish
a modern diamond exchange in order to provide Armenian companies with
Russian raw material," the prime minister said.

Armenia’s polishing firms import most of the country’s rough diamonds
from Russia. The Russian supply is not always free flowing and is
impacted by Russia’s desire to exert economic pressure on Armenia.

Armenia’s polished diamond exports fell 64 percent to $39.08 million in
the first nine months of 2009. In volume, exports dropped 67 percent
to 60,875 carats, an average value of $642 per carat.