OREANDA-NEWS. October 31, 2012. The Supervisory Board of OJSC ALROSA considered approval of the Company’s updated consolidated budget for 2012 at the meeting held in Moscow, reported the press-centre of ALROSA.  

Despite of rather volatile prices for rough diamonds over the past several years, ALROSA has noted that the determining market driver is the prevalence of demand for rough diamonds over supply caused by the reduced production, moderate growth of demand for diamond jewelry on the traditional markets of the USA and Japan, and stable growth of polished diamond consumption on the new markets of India and China.

With due consideration of the current pricing environment, ALROSA assesses growth of the average annual prices for rough diamonds at 1% against 2011 (as compared to the estimates at the beginning of 2012 – 4%). The Company considers moderate increase in the price, which excludes any pressure of speculative component on the rough diamond value by almost all assortment positions, a stabilizing factor contributing to better prospects of the market development in 2013.

In view of the price behavior and the expected supply on the market, in 2012 the Company forecasts rough and polished diamond sales by ALROSA Group to reach some USD 4,590 million to go 3% beyond the level of 2011.

Rough diamond production expected by ALROSA Group in 2012 is 34.4 million carats that is comparable to that in 2011 (34.6 million carats). A slight drop in rough diamond production is a planned factor conditioned by technological features of implementation of the Company’s investment program for the underground mines construction.

ALROSA’s expected net profit is roubles 34.3 billion that is 0.4% above the level initially planned for 2012 and more than 16% above the level of 2011.

To stimulate the new markets development, in the near-time outlook the Company is planning to enter into additional long-term agreements for the supply of rough diamonds in the scope of the program of geographical diversification of ALROSA’s sales policy.

The Supervisory Board approved the Regulations On the Procedure and Terms of Sales of Natural Rough Diamonds by OJSC ALROSA, earlier approved by the Federal Antimonopoly Service of Russia.

The Supervisory Board also approved agreement between the Government of the Republic of Sakha (Yakutia) and OJSC ALROSA on cooperation in the sphere of social support of orphans and children without parental care. Under the agreement, ALROSA will allocate RUB 86 million for housing to orphans and children without parental care. The Supervisory Board approved the new members of ALROSA’s Executive Committee: Valery Kornilov, Director of the Capital Construction Division, Mikhail Lopatinsky, Director of Mirny Mining and Processing Division, Rishat Yuzmukhametov, Chairman of the Profalmaz labor union.

Also, the results of the Company’s purchases in the first half-year 2012 were discussed at the meeting.