At its meeting held on 17 December in Moscow, ALROSA’s Supervisory Board approved the company’s budget for 2014.
According to its preliminary estimates, in 2013 Group diamond mining will exceed 36 million carats, as compared with 34.4 million carats in 2012. Major growth drivers have included the purchase of OJSC Nizhne-Lenskoe; increased diamond grade on the Yubileynaya pipe; and increased production at the Mir underground mine.
In 2014 ALROSA is planning to maintain this level of production at the level of 2013. The company forecasts a stable balance between demand and supply on the rough diamond market, with a potential gradual growth in rough diamond prices by 2-3% over 2014.
ALROSA’s priority target for 2014 is to maintain its position as the world’s leading rough diamond miner, by developing its production facilities and mineral resource base. Other plans for 2014 include:
– Completing construction of the open-pit mine on Botuobinskaya pipe, Nyurba Mining and Processing Division, where diamond mining is to start in 2015
– Beginning operation of the first start-up complex of the Udachny underground mine
– Beginning operation of the Ebelyakh and Ruchey Gusiny placers, OJSC Almazy Anabara
– Launching the second module of the Lomonosovsky Mining and Processing Division (OJSC Severalmaz) processing plant – to reach full capacity of 3 million tons of ore per year
ALROSA has allocated RUB 39 billion for capital investment (as in 2013), with investment in underground mines increased by 30% as against 2013, up to RUB 14 billion. The bulk of investment will go into the construction of the Udachny underground mine.
ALROSA will also start preparing for the new contract period 2015-2017. Long-term agreements with major manufacturers of polished diamonds and jewellery remain a key priority, and ALROSA expects the number of agreements to grow in the new contract period. When selecting customers, ALROSA will take into account the experience of cooperation with customers for both long-term agreements and spot transactions.
Group priorities for 2014 include focusing on the core diamond business and pursuing divestment of non-core assets; increasing the operating efficiency and optimizing the corporate management model; and increasing the number of independent directors on the ALROSA Supervisory Board.