No current need for state support for Alrosa, company has managed to significantly reduce costs - Russian deputy finance minister

MOSCOW. Jan 29 (Interfax) - There is no current need to purchase diamonds for the State Precious Metals and Gemstones Repository (Gokhran) to support Alrosa , as the mining company's financial condition does not cause concern, Deputy Finance Minister Alexei Moiseyev told journalists.

"The management [of Alrosa] has carried out very serious measures to reduce costs and maintain liquidity, which ensure the company's high stability. The company has a large cash reserve; it has significantly reduced costs, so at this stage we see no need for support. Although such a possibility is provided for in the budget," Moiseyev said.

"We will monitor how the situation develops during the year," he said.

The concern of the Yakutia authorities regarding the situation is justified, but for this "there are interbudgetary relations," he said.

Moiseyev also said that in addition to gold, Gokhran was acquiring "certain quantities" of platinum and silver although gold was still the priority.

The Gokhran could buy gold and rough diamonds worth 50 billion rubles in 2026, but diamond purchases will depend on the state of the market, Moiseyev said in December. It was previously thought the Gokhran could spend half of the budget allocations on diamonds this year to support Alrosa amid a prolonged crisis on the diamond market. There is no rush to make these purchases, especially since Alrosa received funds from the sale of its stake in Angola's Catoca, and the company is "coping [with the sales] by itself," Moiseyev said in September.

The Finance Ministry announced an agreement with Alrosa in March 2024 to purchase a portion of its rough diamonds. A deal to purchase the first batch of diamonds was made at that time. The company, which mines 95% of Russia's diamonds, said another deal could be made before the end of 2024.

The Gokhran purchased $1 billion worth of diamonds from Alrosa during the 2008-2009 crisis, when there were no spot sales of rough diamonds for almost nine months. No purchases on a similar scale have been made since; the largest transaction, in 2012, was worth $250 million.