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The Untouchable Pinks

While the G7 nations are tightening their restrictions relating to Russia-sourced diamonds, Alrosa is amping up its production and corporate social responsibility (CSR) credentials.

 

In a series of announcements over the past week, the Russian diamond miner showcased a collection of rare pink diamonds as well as the naming of a stunning 76-carat rough recovered in December – now known as “300 years of St. Petersburg State University.”

 

The collection consists of 15 fancy pink diamonds ranging in size from 0.40 carats to 3.30 carats, all mined, cut and polished in Russia over the past six years. It falls into the Alrosa Diamond Exclusive program that was established in 2019 with the aim of marketing the rarest and largest diamonds mined by the company. The pinks are now available for viewing in Moscow and will be put up for auction in April, Alrosa said.

 

The company also announced its new program for environmental protection and safety through to 2028, opened applications for an annual competition to improve the quality of life and implement socially significant projects in the Mirny region, and launched an incentive program for employees to recruit people to the company. In addition, Alrosa revealed it will begin alluvial gold mining in Yakutia following exploration work done in the region from 2019.

 

Considering all this, what are we to make of Alrosa, considering the sanctions that are being implemented by the G7?

 

To begin with, those diamonds cannot be traded in a G7 country – Canada, France Germany, Italy, Japan, the United Kingdom or the US.

 

The US Office of Asset Controls (OFAC) last week reaffirmed that sanctions would go into effect on March 1 banning the import of diamonds “mined or extracted in Russia, notwithstanding whether they have been substantially transformed in a third country.”

 

That said, there are still more questions than answers relating to how the sanctions will be implemented, and the many concerns the new mechanisms must consider. That’s causing some stress among administrators tasked with their implementation, and more importantly among the trade who must adhere to the new rules.

 

There is a fear that the more complex the mechanisms, the more attractive Alrosa’s diamonds become.

 

So, does that beautiful collection of 15 pink diamonds have a market? Of course it does. There is substantial wealth outside of the G7, and there will no doubt be strong demand for them. There was tremendous interest in the Argyle pinks when those were on the market. Given that the Argyle mine closed in November 2020, dramatically cutting supply of pink diamonds, this collection is indeed rare and in demand.

 

The G7 sanctions are a work in progress. While the March 1 deadline is just two weeks away, there will likely be a grace period for implementation through to September 1.


Ultimately, though, the trade is the first line of defense. Jewelers, dealers, manufacturers, and miners can prepare through robust know-your-supplier and your supplier’s supplier programs to ensure they're not purchasing illegal Russian diamonds.


Buyers should not be enticed to buy goods where it is illegal to do so – even when the diamonds have such rarity, beauty, and single source provenance as Alrosa’s recent announcements unveiled.


Image credit: alrosa.ru

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