MinFin not currently looking at support for Alrosa, company has safety margin - Moiseyev

MOSCOW. Jan 9 (Interfax) - The Finance Ministry is not currently considering the option of supporting ALROSA by increasing funding for Russian State Precious Metals and Gemstones Repository (Gokhran) purchases, Russian Deputy Finance Minister Alexei Moiseyev told Interfax in an interview.

"There is no indication yet that it will be required. The company has a colossal safety margin, it has negative net debt, and with a large margin," he said.

At the same time, sanctions are "of course, a rather unpleasant story, we will see how they develop," the deputy minister said.

Moiseyev added that the company was "preparing [for the sanctions], there was no secret about it, our opponents have been talking about it for a long time".

The measures included in the 12th EU sanctions package concern not only diamonds mined in Russia, but also polished diamonds that were produced from Russian diamonds in third countries and imported to G7 markets with a new country of origin. The most painful is the ban on imports to the G7 countries of polished diamonds weighing 1 carat or more, cut in third countries from Russian diamonds, which will come into effect on March 1, 2024.

Gokhran acts within the budget limit for the purchase of precious metals and precious stones, which amounts to 51.5 billion rubles for 2024. In 2009, Gokhran bought rough diamonds worth about $1 billion from ALROSA as an anti-crisis measure. In the first half of 2020, when diamond sales came to a halt during the pandemic, the state considered a proposal by the head of Yakutia to buy back ALROSA's production worth between $500 million and $1.7 billion. The deal was not necessary, as market demand recovered by the fall of 2020.