Shift to Larger Diamonds Drives Alrosa Sales

RAPAPORT... Alrosa's sales increased in the third quarter amid strongerdemand and a shift to larger diamonds, the miner reported Monday. Revenue from rough stones rose 12% year on year to $949million for the three months ending September 30, the Russian company said. Whilesales volume fell 11% to 6.7 million carats, the average price of gem-qualitydiamonds grew 18% to $199 per carat. Prices have climbed 5.2% since thebeginning of the year on a like-for-like basis, it added. Sales of gem-qualityrough slid 4% to 4.7 million carats in the third quarter, while polished-diamondsales surged 83% to $24.1 million. Production grew 2% to 10.5 million carats during thequarter as the miner increased ore processing at its Jubilee pipe, and raisedoutput at the Udachny and Severalmaz divisions. In the first nine months of the year, revenue from rough stonesimproved 9% to $3.59 billion, and polished revenue increased 9% to $74 million.By volume, sales for the period fell 9% to 29.1 million carats. Productiondropped 11% to 26.4 million carats due to the shutdown of the miner's Mir assetand the termination of open-pit mining at the Udachnaya pipe, Alrosa said. Alrosa has offered some of its inventory for sale over the past year tooffset the lower production. As a result, its stockpiles have decreased 11% to15.5 million carats as of September 30, compared with a year earlier. Alrosa maintained its forecast of an 8% decline inproduction to 36.6 million carats this year, compared with 39.6 million caratslast year. Image: Rough diamonds on a grader's table. (Alrosa)