Source: President of Russia – The Kremlin – English
President of Russia Vladimir Putin: Good afternoon.
Mr Ivanov, during the pandemic, the jewellery sector and its foundation – the diamond mining sector – have come up against difficulties. I am speaking about global production now. Many of your rivals have practically frozen production and fired their staff, and many of them are on the verge of bankruptcy. ALROSA is our largest diamond miner, and since recently the largest in the world. For Yakutia, it is in fact a major budget revenue generating enterprise. How is the company faring, and what would you say about its outlook?
ALROSA CEO Sergei Ivanov: Mr President,
I would like to begin my report with the epidemiological situation, namely in the Mirny District of Yakutia. In March 2020, we took several comprehensive decisions on preventing the spread of the coronavirus infection together with the government of the Republic of Sakha (Yakutia). We managed to gain several months, which we used to prepare our medical infrastructure – both regional and corporate – to receive the first COVID patients.
During the pandemic, the company has invested over 800 million rubles in the measures related to supporting the medicine and health of our employees. Unlike other diamond mining companies, we have not stopped production at our underground mines and open pits.
You are absolutely correct, Mr President, that ALROSA is still the world’s largest diamond producer. Over the past several months, we even managed to somewhat increase our share despite the crisis trends you mentioned. The company keeps developing, and we are engaged in projects related to operating performance, production automation and Big Data – the digital mine project, plus some other projects that have been launched.
Mr President, with regard to infrastructure projects, I would like to thank you for the decision made several years ago to build a new airport in the town of Mirny. We have arrived at an arrangement where the construction of the airfield infrastructure would be financed from the federal budget, and the construction of the airport complex, the fuelling complex, and the grids would be financed by the company. This is a good example of a public-private partnership, where we are going roughly half with the federal budget on the new infrastructure.
We are also in the process of bringing gas to our northern towns, first of all, to the town of Udachny. This will make it possible for us to switch from expensive electricity over to our own natural gas and improve the reliability of our northern regions’ energy supply and energy security.
Of course, the epidemic has significantly adjusted our strategy. We had to respond to an unprecedented decline in sales in the second quarter. ALROSA had to take upon itself the stabilisation of the international diamond market. We supported the cutting factories that found themselves in a rather difficult situation.
We can see the demand coming back. Of course, these levels are lower than before the pandemic, but the company is in good financial shape and is capable of getting itself ready for the expanded market.
Mr President, in conjunction with the Finance Ministry, we are discussing possible purchase of diamonds for the Russian State Depository for Precious Metals and Gems. You supported such a transaction during the previous crisis in 2008. It helped the company stabilise the social situation and support the budget of the Republic of Sakha (Yakutia), because we are a systemically important company and our operations are critical for the budget. At the same time, in 2008, diamonds were purchased at rather low prices due to the crisis, and later, when the market recovered, the state sold them at a good price. Now, exactly the same instrument is being discussed. We are confident we will finally agree on everything soon.
To be continued.