ALROSA Expects 5-Percent Growth in Rough Prices

Moscow: ALROSA expects that global rough prices will go up by 5% in 2014 over the last year, according to the ITAR-TASS report from St. Petersburg. This was disclosed to journalists on the sidelines of the St. Petersburg International Economic Forum by Fyodor Andreev, President of ALROSA. “We reckoned on a growth rate of 5%. I think it is achievable,” he said.

ALROSA Group, the world’s leader in diamond mining, increased its revenue by 12% to 168.5 billion rubles in 2013 compared with the previous year, as calculated under the International Financial Reporting Standards (IFRS).

According to Andreev, the current global demand for diamonds is high enough. “Unlike the past two years, America is growing, India has recovered and China shows double-digit growth in the consumption of diamond goods,” he said.

ALROSA’s CEO also noted that the company’s revenue targets for 2014 based on the results of the past six months are likely to be revised upwards. According to Andreev, ALROSA will have at least a 12-percent boost in revenue in 2014 compared with the last year.

Speaking about the sale of natural gas assets, Andreev said that the company intends to start drilling operations in February 2015 and will use the results to return to negotiations with Rosneft. “Besides, there are a number of other bidders interested in these assets,” he added.

As it was previously reported by ITAR-TASS, the closing of this deal worth $ 1.38 billion under to the agreement with Rosneft (which also implied selling of Irelyakhneft and ALROSA-Gas in addition to Geotransgaz and Urengoy Gas Company) was tied to a certain number of terms including final corporate procedures for assets after their due diligence. The transaction was not completed within the specified period (December 31, 2013) due to disagreements between the parties on the price. Rosneft found the price too high after reading the data on the reserves. Later on, there was information that the deal may be closed with a discount to the previously agreed price (no more than 10%, but sources familiar with the terms of the deal, denied this). The additional audit of the reserves, according to ALROSA, did not find any significant discrepancies compared to the original level, but these findings were not accepted by Rosneft.