ALROSA Caps 2016 Output to Reduce Stocks

Moscow: ALROSA’s production fell 2 percent to 37.4 million carats last year in line with the miner’s plan to keep inventory in check.

The company reduced output from alluvial deposits in the second and third quarters in order to align with the diamond market environment in 2015, it said. Fourth-quarter production increased 10 percent to 9.5 million carats driven by higher production at its underground mines.

ALROSA’s objective in 2016 was to reduce its 22 million carat stockpile with which it started the year, chief financial officer Igor Kulichik said in May. Rough inventory ballooned in 2015 following a slump in rough demand due to oversupply of polished and inflated rough prices.

The company's inventory was reduced by about 2.9 million carats as sales volume increased 34 percent to 40.1 million carats during the year. By value, rough-diamond sales exceeded $4.3 billion, implying 25 percent growth from 2015 based on Rapaport records.

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