27 Apr 2024 12:17

Russia's Gokhran to continue buying diamonds from Alrosa if needed, limit may be altered - dep finance minister

MOSCOW. April 27 (Interfax) - The Gokhran, Russia's state gemstone and precious metals repository, will continue purchasing diamonds from Alrosa for the State Fund, Deputy Russian Finance Minister Alexei Moiseyev told reporters.

There are no plans just yet to increase Gokhran's budget limit for purchases, which is 51.5 billion rubles in 2024, although it "could alter," he said. This limit is not only for the purchase of diamonds and also applies to precious metals and works of art, Moiseyev said.

The Finance Ministry does not give breakdowns of what it buys. The Gokhran has increased purchases almost five-fold over the past few years, and the volume has increased significantly more than the price, Moiseyev said.

He said the need for a purchase deal may arise for both Alrosa and the Gokhran from the point of view of balancing the state repository's portfolio.

There are no plans to sell diamonds purchased by Gokhran in the past, Moiseyev said.

"There were some big sales in the second half of 2020 to prevent a stratospheric rise in the price [of diamonds] when market demand surged. Gokhran intervened in the market as regulator and sold these gemstones to stabilize prices somewhat, because a very high price can prompt people to start buying other gemstones, synthetic ones and so on. Right now there is no need to rejig the market, in fact we think the price could be higher," he said.

He also said an additional share by Alrosa was not currently being considered. This question arose after Yakutia's State Assembly passed a law that rules out a reduction in the republic's stake in the company, including during an additional issue, and consolidates Yakutia's 25% stake. Moiseyev said the Yakutia legislators "thereby expressed their attitude towards this company, which is the republic's national heritage.

A share issue would dilute the stakes not only of foreign investors who own shares in Alrosa but also those of "ordinary Russian citizens, whom we certainly don't want to dilute," Moiseyev he said. He also said the stake held by foreign shareholders did not prevail in the company's free float.