Russian diamond mining company Alrosa could halt some of its production and reduce its workforce size in 2025, reports Reuters citing the company’s CEO Pavel Marinychev.
Marinychev said the move comes as a result of “deep crisis” in the global diamond industry and the impact of Western sanctions on Russian diamond sales.
Following Russia’s invasion of Ukraine, sanctions were imposed by Western nations on several Russian companies, including Alrosa.
Marinychev highlighted that for the second consecutive year, diamond prices have been in decline.
The crisis facing Alrosa is intensified by the G7 and EU’s ban on Russian diamond purchases, which forms part of the broader sanctions regime.
Marinychev was quoted by the news agency as saying in a local television station in the Yakutia region of Russia’s Far East that: “Certain areas that are less profitable, which are at the borderline of profitability, may be subject to suspension during this crisis period.”
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By GlobalData
Despite the potential production halt, the CEO mentioned that operations could be reactivated should market conditions improve.
Marinychev added: “We are currently in a rather difficult situation. Our task is to endure and wait out this period, to wait for prices to start rising again.”
The Russian government has occasionally stepped in to purchase diamonds from Alrosa via a state fund.
To manage costs amidst these challenges, Marinychev looks to reduce labour expenses by 10% in 2025.
This strategy will involve cutting some of the company’s 35,000 workforce, though the exact number of staff reductions was not disclosed.
