Investment decision on restoring Mir mine nearly taken, capex to rise sharply in 2023 - Alrosa CEO

VLADIVOSTOK. Sept 6 (Interfax) - Alrosa has nearly finished taking the investment decision on the project to restore the Mir mine, and the company is currently finalizing the decision by taking into account the instructions of the supervisory board, the Russian diamond miner's CEO, Sergei Ivanov, told Interfax on the sidelines of the Eastern Economic Forum 2022.

"We could say that it [the decision] has nearly already been taken, and it is just being finalized by taking into account the instructions set by the supervisory board for us," Ivanov said.

Consequently, Alrosa's capex will rise sharply in 2022 to 33-35 billion rubles against the planned amount of 33 billion rubles, Ivanov said.

"When accounting for inflation that is outpacing the purchase of equipment, I think that capex should grow slightly. We are currently already purchasing something on the horizon of the next three-year period. Meanwhile, several projects will be postponed to next year. I think that capex next year will certainly grow when accounting for the Mir mine," Ivanov said.

Alrosa estimated the cost of restoring the mine at $1.2 billion-$1.5 billion at the start of this year. The construction would take between six and nine years.

Capex was put at 73 billion rubles when the first estimates were carried out in 2019.

The Mir mine flooded during an accident in August 2017, when water burst into the mine from the overhead pen pit. The ore of the Mir deposit is rich in high-quality rough diamonds. The Mir mine produced more than 10% of Alrosa's diamonds prior to the accident.