Alrosa Considers Consolidating Key Mining Division

RAPAPORT... Alrosa's supervisory board will vote Monday on whether to close a subsidiary that controls two of its largest mines, bringing those deposits into its core business.The Russian miner owns a 97.5% stake in Alrosa-Nyurba, which holds the licenses for the Botuobinskaya and Nyurbinskaya pipes. Alrosa is looking to improve efficiencies through the move, as it already operates the mines on behalf of the subsidiary, and carries out any exploration, rough-diamond processing, sorting and sales tasks associated with the deposits.  "The company's top management believes that consolidation ofcore mining assets on Alrosa's balance sheet will result in the improvement oftheir management efficiency, remove duplicate functions, cut administrative andmanagement costs, [and] eliminate redundant operations in sorting and sale ofrough diamonds," Alrosa CEO Sergey Ivanov said last week. Alrosa-Nyurba, which employs 30 people, had revenue of RUB 44 billion($668.7 million) in 2018, while net profit was RUB 16.6 billion ($252.3 million). Production from the two deposits totaled 4.6 million carats out of 17.6 million carats that Alrosa recovered in the first half of this year.If approved bythe supervisory board, the motion will be discussed by Alrosa-Nyurba's minorityshareholders before a final decision is made. Image: The Nyurba open-pit mine. (Alrosa)