is the world's second-largest diamond producer, but Soviet-era restrictions
and the De Beers cartel have crimped Russian profits from the gems.
South Africa-based De Beers is relaxing its grip on the world's
diamonds, and Russia is angling to make a name for itself in the
lucrative, secretive industry. "It's time for Russia to step out
in this business," said Natalya Marakina, a member of the exclusive
Russian Diamond Chamber, a club for diamond producers. "We are ready."
has an advantage these days, as fears mushroom about gem sales financing
the wars in Sierra Leone, Angola and Congo "The Russians are an
important source of non-bloodied stones," said John Meyer, an industry
analyst with Societe Generale in London. "The diamond industry in
Russia has had a pretty low profile ... and this could be a pretty
good marketing tool for them."
exports would bring increased government revenues - the state owns
a majority stake of Alrosa - and good news for an economy still
hung over from a decade of decline. Most Russian diamonds come from
Sakha, formerly known as Yakutia, a province five times the size
of Texas that straddles the Arctic Circle. Soviet authorities coaxed
workers to the ever-frozen wilderness with bloated salaries and
generous benefits. Alrosa
has trimmed the work force, but production costs remain high - about
five times as much as De Beers spends extracting stones from its
South African deposits. Once they leave Yakutia, diamonds are guarded
by a series of private militias. Addresses of the Moscow vaults
are a prized secret.
Russia produces about 20 percent of the world's rough diamonds and
has vast untapped reserves. Russia's diamond monopoly
develop new mines and reach more markets.
40 years in the diamond business, Russia has grown out of children's
shorts and understands how to sell diamonds so as not to harm the
market or our own interests," said Valery Rudakov, chief of Russia's
precious gem reserves.