SURAT/MOSCOW (Commodity Online): In February, Gems and Jewellery Export Promotion Council (GJEPC), headed by the council’s chairman Vasant Mehta, had met a four-member delegation from Alrosa Co Ltd, led by vice president Yury Okoyomov, in Mumbai.

And fruits of that meeting were out this month when Alrosa, Russia’s largest diamond miner, inking pacts with three local diamond manufacturers — Rosy Blue, Diamond India and Ratilal Becharlal and Sons — for the supply of rough diamonds over a three year period.

Till now, De Beers was the main supplier of diamonds to Indian diamond industry. The $490 million deals were signed in New Delhi, and were the first of their kind in terms of size of the contracts between a few Indian companies directly with a miner.

The deal is unique in that as it is a direct source of supply for local diamond companies, which till recently imported roughs mined elsewhere from centres such as Belgium and Israel, thereby adding to their costs.
 


This agreement will lead to cost savings of at least 3-4% for the companies, as it is a direct deal with the miner, bypassing the other centres.

A press release said the contracts provide that the range and prices of the rough goods to be supplied will be agreed upon by the parties on a quarterly basis, based on the current situation in the global diamond market, with a possibility of additional supply.

In 2009, state-owned Alrosa’s sales to Indian diamond manufacturers amounted to over $500 million, which is equivalent to half of the company’s export sales.

In the fiscal through January, India’s polished diamond exports were up by 11% at $13.8 billion from the corresponding period of the previous fiscal, while polished diamond imports increased 15.5% to $8.5 billion. Over the same period, rough imports were down by 3% at $7.13 billion, while rough exports ended 13% lower at $584 million.

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