The Russian government will begin purchasing diamonds to support the Alrosa state company for the first time in 15 years. The company suffers from the sanctions imposed on Russia by the West.
The Federal Treasury of Russia and Alrosa made an agreement on the procurement of diamonds for Goskhran, gems and precious metals repository. The first agreement was signed in March after Alrosa had been added to the sanctions list of the European Union in January 2024. Moreover, the G7 states prohibited direct import of diamonds from the rogue state and began implementing a gradual embargo on the delivery of Russian diamonds.
The Russian government reportedly purchased the diamonds produced in the pariah state during the 2008 financial crisis. Then the gems repository bought a US$1 billion worth of precious metals from the Alrosa corporation.
Processing more than 90% of global production of diamonds, India is the largest purchaser of diamonds from the Russian Federation. However, the Alrosa state company experienced problems even on the Indian market in late 2023. An Indian regulator asked the company to cease the deliveries, emphasizing on surplus of raw materials.
The EU estimates that the Russian Federation will lose more than €4 billion from losing a part of the diamond market. In turn, Dmitry Peskov, spokesperson of the Kremlin, urged the West that Alrosa would search for ways to circumvent the sanctions and enter new markets.
The situation shows that the sanctions imposed on the Russian diamond industry are effective. However, the Western countries should continue imposing sanctions against the rogue state and check whether any country, company, or entity assists the Kremlin in circumventing sanctions to prevent the pariah state from obtaining profits from its trade with other states.