Alrosa reports Q2 results, reaffirms FY guidance

23rd July 2018 By: Mariaan Webb - Creamer Media Deputy Editor Online

Russian diamond mining major Alrosa has reported an 18% year-on-year production decrease in the second quarter, as the closure of the Mir underground mine in August last year and lower diamond grades continued to weigh on its operations.

The miner produced 8.5-million carats in the second quarter, compared with 10.4-million carats in the same quarter of 2017. Compared with the first quarter of 2018, production was up 15%, owing to seasonal growth in output at alluvial deposits and production ramping up at the Udachny underground mine and the Severalmaz mine.

The average grade for each tonne of ore decreased by 18% year-on-year and by 35% quarter-on-quarter to 0.84 ct/t, mainly owing to the restur of production at the lower grade alluvial deposits operated by Almazy Anabara and a lower diamond grade at alluvial deposits developed by the Mirny division.

The year-on-year decrease is as a result of the closure of the Mir underground mine and lower output at the International underground mine.

Alrosa has reaffirmed its 2018 production guidance of 36.6-million carats – a decrease of 8% on 2017’s output.

Second-quarter rough diamond sales were nine-million carats, down 32% quarter-on-quarter, including 6.3-million carats of gem-quality diamonds and 2.7-million carats of industrial diamonds. Alrosa explained that the quarter-on-quarter decrease was as a result of the high base effect in the first quarter of this year, as a result of six-million carats that were sold from stocks.

Sales amounted to $1.057-billion in the June quarter.