By Hovannes Shoghikian
Russia’s state-owned diamond monopoly said on Friday that it has started implementing a recent agreement with the Armenian agreement which should shore up Armenia’s declining diamond-processing industry. Under the agreement signed in Yerevan in August, the ALROSA giant undertook to resume supplies of Russian rough diamonds to Armenian companies. Those supplies fell sharply in 2004 and ceased altogether in 2006, contributing to an ongoing downturn in a sector that was once a key driving force of Armenia’s economic growth.
The ALROSA chairman, Sergey Vybornov, said 22 Armenian diamond-cutting firms applied to his company following the August deal but only four of them were chosen to receive Russian precious stones. They have already been supplied with $1 million worth of uncut diamonds, he told reporters in Yerevan.
According to Vybornov’s deputy, Sergey Ulin, ALROSA, which mines diamonds in eastern Siberia, plans to carry out at least $28 million worth of such deliveries in the course of next year and could raise their volume in 2009. He said the Russian giant, which accounts for one fifth of global rough diamond sales, sees “optimistic grounds for developing cooperation” with Armenia.
Underscoring the importance of that cooperation, both President Robert Kocharian and Prime Minister Serzh Sarkisian received the visiting ALROSA executives on Friday.
Minister for Trade and Economic Development Nerses Yeritsian said after the talks the Armenian government will do its best to facilitate ALROSA operations in the country. Yeritsian said the government is also holding “active discussions” with the Russian company on the possibility of expanding their presence into other sectors of the Armenian economy. He gave no details.
Vybornov said in that ALROSA is negotiating with the authorities in Yerevan over the possible of an unnamed Armenian mining enterprise. It was not clear if he referred to the Indian-owned Ararat Gold Recovery Company, which develops the bulk of the country’s gold reserves.
According to government statistics, Armenian plants manufactured 25 billion drams ($82 million) worth of gem diamonds in the first half of this year, down by 48 percent from the same period last year. Armenia’s total diamond output dropped by over 17 percent to 93 billion drams in 2006, continuing the production slump that began in 2004. Refined diamonds have since ceased to be the country’s single largest export and now account for just 1 percent of its gross industrial production.
Government officials and analysts blame the sector’s decline on a combination of internal and external factors, including falling global demand for precious stones and the dramatic appreciation of the Armenian dram.
(Photolur photo: Vybornov, left, and Ulin speak at a news conference.)