The Supervisory Board of ALROSA recommended to reduce production this year by 13%
The strategic planning Committee under the Supervisory Board AK “ALROSA (MCX:ALRS)” following consideration of the proposals of the management is recommended to reduce production in 2020 to 28-31 million carats, it said in a statement. The original forecast was about 34 million carats.
This recommendation was made by the Committee as a reaction to the crisis situation on the world diamond market. The Committee, with the Supervisory Board considered the proposed management options reducing costs and optimizing production.
Following the suspension of production at the assets “dawn” and “Aikhal” the company took the decision to suspend the industrial area from the Verhne-Munskoe Deposit. Until the beginning of June will be carried out conservation of all services field. Commencement of mining operations in the quarries of the field will take place on 1 October 2020.
In 2019 the total production at the mine “Aykhal” and career “dawn” were about 2.6 million carats. Exploration at the Verkhne-Munskoe Deposit in 2019 amounted to 1.5 million carats in the diamond content in the ore is 0.6 carats per ton (below the average for the company – 0,9 CT.)
Top-munskoe field related to beanotown because of low diamond content in the ore, was launched in late 2018.
ALROSA explained that the decline in production is planned to provide at the expense of fields with lower margins because of the low performance and the price of mined diamonds. Stop work on the assets to prevent the formation of a low liquid residue, the least demanded in the market.
Pandemic coronavirus and taken to combat measures have had a significant impact on the demand for jewelry products with diamond, in the beginning of the year demonstrated high growth rates. In this situation, large manufacturers of diamonds given the opportunity lapidary sector not to redeem previously contracted goods to accelerate the opportunity for participants the entire diamond chain of a difficult situation, and at the same time to maintain stable prices for diamonds.