Jeweller - April 2022

Alrosa's gem-quality stones which
also include a 242-carat rough.
and routes, even looking for more ‘friendly’ transit points.
However, Alrosa is not able to raise equity, or cash and debt for capital
investments such as mining project development. However, this is an
issue for the longer-term, and not the immediate future.
The shipping of polished ‘on memo’ is also hampered; but this is not a
major component of the Russian diamond trade and is more of a longerterm
issue anyway, if it’s at all significant.
Many people within the diamond and jewellery industry, as well as those
external to it, are asking: “Should the entire global trade of all rough from
Russia be blocked immediately?”.
It is actually hard to see how it can be fully stopped globally; and who
would actually make that decision. This is a truly multi-national industry.
Polished versus Rough
Rough diamonds have Kimberley Process (KP) certificates and therefore
have clear provenance (for their first export) of origin and a chain of
custody; most polished diamonds do not. I will come back to polished
diamonds later, but first let me address the matter of rough.
Probably the only workable mechanism, if the industry chooses to act,
is to use the Kimberley Process to stop issuing certificates for rough
diamonds, which would therefore stop the ability for anyone to export
rough diamonds to any country outside of Russia.
At the time of writing, that decision had not been taken, as far as I
am aware.
Although I suspect that a KP ban on Russian diamond exports might
be being discussed behind closed doors already it will certainly
require international agreement by the participating member
governments of the KP if this next step in blocking Russian diamonds
is indeed going to happen.
Other diamond producers might see the current situation as an
opportunity to increase prices for their non-Russian goods and lobby
for a ban on Russian rough. This may well be happening behind the
scenes. It has been said, never waste a crisis, and that is true when it
comes to your competitor!
The lobbying will certainly be happening in the spheres of the far more
influential oil and gas producers globally. To put things into some sort of
perspective, Russian rough diamonds might equate to $US4-5 billion in a
good year; this is minimal in comparison to Russian oil and gas.
Russia is among the world's largest producers of both crude oil and
dry natural gas – and the figures relating to these industries dwarf the
diamond industry by comparison.
Typically, Russian oil exports account for triple the amount of revenue
compared to its gas. Logically Russia will seek new markets for its oil
and gas, China being one obvious option. Supply shortages, high levels of
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