Russia’s Alrosa said on Tuesday it expects the European Commission (EC) to force it to cut the value of its rough diamond sales to De Beers by 25% before approving a five-year deal between the two.
An Alrosa representative confirmed an Interfax report that the Russian producer believed the European Union’s competition watchdog was only likely to approve the deal if sales were reduced to around $600-million a year.
In December, De Beers and Alrosa signed a new five-year deal providing for sales of $800-million a year and covering about half of Alrosa’s output. They formally notified the EC of the $4 billion deal in February.
But on Tuesday, De Beers said it had not received any instruction from the Commission yet.
”The Commission has not yet communicated the outcome of its review with De Beers, and De Beers has no knowledge of any proposal of the kind attributed to Alrosa today,” said Lynette Hori, a representative for the global gem giant.
She said De Beers was hoping for approval by the end of the year, and in the meantime continued its business with Alrosa on a ”willing buyer, willing seller” basis.
De Beers, in which Anglo American owns 45%, supplies around two thirds of the world’s rough gems. – Reuters