Alrosa reaffirms commitment to long-term contracts

1st November 2017 By: Creamer Media Reporter

JOHANNESBURG (miningweekly.com) – Russian diamond giant Alrosa has reaffirmed its commitment to channel 70% of its sales to key customers governed by three-year contracts.

Alrosa started implementing long-term contracts in 2009 and has said that the sales practice had repeatedly proved its efficiency.

“It ensures sustainable employment for the seller and the buyer, and protects them from price volatility in the diamond market. Therefore, long-term contracts will remain the key sales channel,” Alrosa VP Yury Okoemov said on Wednesday.

Monthly sales volumes are currently determined for the entire three-year period, but Alrosa will switch to a yearly allocation when the new contract period starts on January 1, to allow for more flexibility to respond to changes in the market.

Alrosa has long-term contracts for gem-quality rough diamond sales with 47 international companies and nine domestic companies. It also has three long-term contracts with domestic companies for the sale of industrial diamonds.

The group also sells rough diamonds in almost equal shares at auctions and under spot contracts.