Russian diamond mining company Alrosa is prepared to reduce diamond sales to De Beers by 25% in a nod to European Union antitrust concerns, an Alrosa executive said on Friday.
The move comes after the EU Commission said earlier this month that a multibillion dollar deal between Alrosa and De Beers restricts fair competition and break antitrust rules.
The commission requested Russia cut deliveries and gave the companies two months to respond. Under the agreement, signed in December 2001, Alrosa pledged to sell $4-billion worth of diamonds to De Beers over a five-year period, equivalent to about half its annual production.
By agreeing to cut sales by 25%, Alrosa would lose $600-million in potential profits, said Sergei Ulin, the company’s vice president, the Interfax news agency reported.
State-owned Alrosa is Russia’s only diamond mining company and the world’s second largest rough diamond producer, after De Beers. De Beers, an Anglo-South African concern, currently controls about 60% of the world’s rough diamond supplies and produces 43% of world output.
Alrosa also announced plans to sell diamonds jointly with an Angolan state-run diamond company. Alrosa holds a 32,8% stake in Angola’s Catoca diamond refinery and plans to acquire a 20% stake in a project to develop two Angolan mines. – Sapa-AP