By Swann Collins, investor, writer and consultant in international affairs – Eurasia Business News, August 24, 2022

Russian mining giant ALROSA has gradually restored diamond exports to almost the level that was reached by February 24, 2022, reported Bloomberg. According to those familiar with the topic, ALROSA is now again selling diamonds for more than $ 250 million a month, while sales are only $ 50-100 million per month lower than the level reached before the start of the Russian military operation in Ukraine on February 24. Sales resumed as some Indian banks became more relaxed about transactions in currencies other than U.S. dollars. Payments are done in rupees.

Most of the stones of ALROSA are sent to producers in India. There they are cut and polished, turning into products ready for use in earrings and wedding rings. According to sources, ALROSA sold diamonds to buyers in India and Europe mainly in exchange for rupees. At the same time, as Bloomberg notes, there is nothing to indicate that the sales violated sanctions or regulations.

A representative of ALROSA declined to comment.

In May, Bloomberg reported that ALROSA supplies about a third of the required amount of rough diamonds to the world market. The imposition of US sanctions against the company caused panic in the diamond industry.

Read also: ALROSA launches online jewelry store for Russian diamonds

In June, the diamond industry learned that India wants to coordinate with Russia to trade in rupees. Earlier, India decided to develop mechanisms for cooperation with Russia in the face of Western sanctions.

Since the beginning of March, the Russian company has been under US sanctions. ALROSA CEO Sergey Ivanov also fell under the restrictive measures.

On August 10, ALROSA informed investors about the fulfillment of obligations under Eurobonds in accordance with the requirements of Russian legislation. Due to the Western sanctions restrictions imposed on ALROSA and Alrosa Finance S.A., the issuer of two Eurobond issues in the amount of USD 500,000,000 each with maturities in 2024 and 2027, for which the Company acts as a guarantor,  the payment of the next coupons for each of the issues (“Coupons”) could not be made.

In accordance with the Decrees of the President of the Russian Federation dated March 5, 2022 No. 95 and dated July 5, 2022 No. 430 on August 10, 2022, ALROSA sent funds to the NSD (National Settlement Depository) for subsequent transfer to the holders of Eurobonds, whose rights are recorded in the Russian depository infrastructure in accordance with the registers of holders, formed as of August 1, 2022 based on the results of the procedure conducted by NSD JSC to identify holders of ALROSA Eurobonds. Coupon payments are made in Russian rubles in the manner determined by the Board of Directors of the Bank of Russia and provided for by the official explanation of the Bank of Russia dated 20.05.2022 No. 6-OR.

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© Copyright 2022 – Swann Collins, investor, writer and consultant in international affairs.