Stones by zodiac signs

What mineral is mined only in Russia?

Every third diamond in the world is mined by Alrosa; up to 90% of the world’s amber reserves and deposits of unique minerals are concentrated in Russia. Russian mining companies are beginning to develop the production of their own jewelry Alexandra Terentyeva
Alexander Gubsky
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I’ll read it later “People build a chain: they mined a diamond, cut the diamond – added value is 15% from the textbook, on a piece of jewelry – 80%. Here it is, money – build your vertical and structure,” the then president of Alrosa, Fyodor Andreev, shared with Vedomosti in 2009. “We’ve been building for 10 years, we analyze: the cutting business – 10 years of losses, it would be better not to analyze jewelry at all.” The cutting division, Alrosa Diamonds, created in 2000, spent most of its time analyzing prices on the diamond market so that the parent company could better navigate when selling diamonds. Now the cutting complex, which, in addition to the Moscow branch of Alrosa Diamonds, includes two subsidiaries – the Barnaul Kristall plant and a 51% stake in the Orel-Alrosa enterprise – works much more efficiently: in 2013, it sold diamonds ” Alrosa earned $150 million (total revenue was $5 billion). Also in 2013, Alrosa Diamonds entered into an agreement with Sotheby’s to sell at auction unique diamonds produced by the company. And the company began to redistribute rough diamonds between its structures: the largest stones are now cut by specialists in Moscow, the smaller ones are sent to regional factories, where the cost of work is an order of magnitude lower than in the capital ($40-50 per carat). Alrosa is now considering the possibility of attracting major global jewelry manufacturers as long-term buyers or strategic partners for diamond production, the company reported in September. Direct supplies of high-quality natural raw materials can be of serious interest to jewelers, notes BCS analyst Oleg Petropavlovsky. This summer, when the European Commission discussed possible additional sanctions against Russia due to the Ukrainian crisis, one of the measures discussed was a ban on the import of Russian diamonds. Belgian officials sharply opposed this: Russia’s main diamond producer, state-owned Alrosa, supplies 50% of its diamonds to Antwerp, which accounts for 25% of the turnover of the world’s largest diamond hub. “The people in Antwerp need Alrosa more than Alrosa needs Antwerp,” The Wall Street Journal quoted Dilip Mehta, CEO of Rosy Blue, one of the world’s largest trading and jewelry companies. As a result, sanctions were never extended to Russian diamonds.

Russia in diamonds

In recent years, Alrosa has taken first place in diamond mining in the world. In 2008, it produced about 22% of the world’s diamonds, but by 2012 its share had risen to 30%. The Russian company took over the championship from De Beers during the crisis of 2008-2009. Then sales of diamond jewelry fell by 22% over the year to $74 billion a year. De Beers had to reduce production by 26%, while Alrosa maintained it due to the fact that the bulk of production that year – to the envy of diamond miners from other countries – was bought by Gokhran. “The Canadian government would never do this, there was no point in even contacting them,” said the largest Canadian diamond miner, Bob Gannicott, in an interview with Vedomosti in 2010. Since then, the balance of power in the industry has not changed: Alrosa – the world’s leading diamond producer. This year, according to its own forecast, it will produce 36 million carats, and within five years it will increase production to more than 40 million carats. It was then, in 2008-2009, that Alrosa began to build its own sales policy based on long-term contracts. Until the mid-2000s. Alrosa sold some of its products through De Beers, some in Russia “at a huge discount,” Sergei Vybornov, who in 2007-2009, said in an interview with Vedomosti. was the president of the company. In 2008, the Russian company stopped selling diamonds through De Beers. The first long-term contracts were concluded in 2009. Today, Alrosa sells up to 70% of raw materials under such contracts, the rest is sold under one-time contracts and tenders. Among the company’s clients are large foreign jewelry companies – the American Tiffany & Co, the Chinese Chow Tai Fook and the Indian Rosy Blue. The largest Russian buyers are the state-owned Smolensk production company Kristall, the Yakut EPL Diamond, and the Yakut Diamond Company. A challenge that the global diamond industry has faced in recent years is the penetration of synthetic stones into the market, which until recently were used only for industrial needs. In a 2012 market report, Bain & Company warned that cases of man-made diamonds being sold as natural diamonds were becoming more common. The problem is that it is possible to understand whether a stone is artificial or not only in laboratory conditions. Therefore, large manufacturers such as De Beers are working on special equipment that will allow them to determine whether a stone is natural or not, writes Bain & Company.

Optimists and pessimists

The total revenue of all diamond mining companies in the world, according to Bain & Company, is about $16 billion per year (in 2012 – $15 billion, in 2013 – $16 billion). The revenue of sellers of diamond jewelry is much higher – $72 billion. And in this market, Russia is still a completely invisible player. The largest consumer of diamond jewelry is the United States. In 2007, sales in this country amounted to $45 billion, while jewelry worth $100 billion was sold worldwide. This year, the United States will account for a little more than a third of sales – about $30 billion. But the fastest growing markets are China and India. Compared to 2007, this year the Chinese will spend 2,8 times more money on diamond jewelry – $14 billion, and Indians – 1,5 times: $12 billion. Russia, according to Bain & Company, accounts for approximately 3% of global consumption. According to a Bain & Company study, in Russia only 40% of households have at least one piece of diamond jewelry, while in European countries this figure exceeds 70%, and in the United States it is at 85%. According to Alrosa IFRS data for nine months, the share of diamond supplies to the domestic market amounted to 11,7%, while five years ago it exceeded 20%. At the same time, the Smolensk Kristall, in a report for 2013, indicates that Alrosa reduced sales to it in 2013 by 1,7 times to 172 carats, so the company has to purchase part of its raw materials abroad. At the same time, as Kristall writes, 000% of the raw materials it uses are Alrosa diamonds purchased on the market. And, for example, in 30, Alrosa’s share accounted for 2000%. Kristall’s Russian sales account for about 3%, and this share remains almost unchanged, a company representative notes. “Over the past 10 years, the diamond jewelry market has experienced a period of rapid growth in sales and is now experiencing a period of decline. Now sales of jewelry with colored stones are growing to a greater extent,” says Eduard Utkin, deputy general director of the Guild of Russian Jewelers. When the purchasing power of Russians is falling – and this is a fact that cannot be ignored – it would be reckless to talk about the potential for increasing sales, he believes. The second factor holding back sales of diamond jewelry is the increase in selling prices for manufacturers and importers of jewelry made from precious metals with diamonds, he continues: prices for gold and diamonds are determined by the world market, quoted in dollars and converted into rubles at the current exchange rate. Another problem is over-regulation of the jewelry industry. A bill has been introduced to the State Duma obliging jewelry stores to sell items costing more than 15 rubles. only upon presentation of a passport and filling out a questionnaire, indicating place of birth, residence, work, etc. But EPL Diamond, in its RAS report, notes that since 2009, the consumption of diamond jewelry in Russia has been gradually growing. Thanks to this, the company increased its network of salons in Russia from 13 in 2010 to 60 in 2013. There are prospects for growth, EPL Diamond CEO Mikhail Dyakonov-Belie is sure.

Homeland of amber

Russia is rich not only in diamonds. The Kaliningrad region contains up to 90% of the world’s amber reserves, and the only enterprise in the world conducting industrial extraction of amber is located here – the Kaliningrad Amber Combine (KYAK). In Soviet times, the plant produced up to 900 tons of amber per year, 2500 people worked at the enterprise, but by the beginning of the 10s of the 500st century. There are less than 300 employees left at KYAK, production has dropped to 2013 tons. At the moment, KYAK is undergoing a corporatization procedure – the enterprise is transferred from the Ministry of Finance of the Russian Federation to the state corporation Rostec. This procedure should be completed at the end of this year – the beginning of next year, but the new management team has already arrived at the enterprise – in August 2 (see interview with the acting general director of the Kaliningrad Amber Factory Mikhail Zatsepin on pages B3-B2013). The main flow of investment into KYAK from Rostec should come after corporatization is completed, but by optimizing sales and removing intermediaries from the amber trade, the new management of the plant has already returned the enterprise to profitability: at the end of 42,8, KYAK’s net profit was 868,6. 2013 million rub. with revenue of 63 million rubles. Even more impressive figures are from KYAK’s subsidiary, the processing enterprise Yantarny Jewelerprom JSC: for the nine months of 729, the company showed 2014 rubles. profits for the same nine months of 84 – more than 60 million rubles! The main efforts of the new team are aimed at developing processing, producing finished products and creating a “fashion brand” from amber: over the past year, the number of employees at Yantarny Jewelryprom has increased by 200% to 200 people and, according to Zatsepin, “we have about XNUMX more people.” We’ll be able to find you a job.” The company plans to develop its own network of jewelry stores under the Yantarny Jewelryprom brand.

Gems for export

Jewelry making in Russia began in 1668 with colored stones found by the Tumashev brothers in the Murzinskaya Sloboda area on the Neiva River in the Urals, says Yulia Prytkova, a representative of the government of the Sverdlovsk region. The Urals are a unique region where the largest amount of minerals and semi-precious stones is concentrated. But now in Russia only emeralds and alexandrites are mined from precious stones, says a representative of the Ministry of Natural Resources. Rubies are not mined (in the Sverdlovsk and Chelyabinsk regions). Of the three Russian emerald deposits located in the Sverdlovsk region, actual mining is carried out only at one – the Malyshevsky emerald-beryllium deposit, says a representative of the Ministry of Natural Resources. There is no production at the Sverdlovsk and Krasnoarmeyskoye fields. The Malyshevskoye deposit was discovered in the middle of the 19th century, and now the Kaliningrad Amber Combine holds the license for its development. Of the semi-precious stones mined in Russia, the most significant are jade, amber and jadeite, says a representative of the Ministry of Natural Resources. Jewelry jade is mined only at the Kavoktinskoye deposit in Buryatia (2012 tons were mined in 38,2, there are no more recent data), says a representative of the Ministry of Natural Resources. The license for this deposit is held by Zabaikalsky Mining Enterprise LLC, controlled by Rostec, according to SPARK-Interfax. Jade from other deposits is predominantly of semi-precious quality. The largest producers are the Irkutsk-based Baikalquartz Samotsvety and Sibirgeologiya, as well as the St. Petersburg company MS Holding, according to data from the Ministry of Natural Resources. In 2012, they extracted 371,7 tons of graded jade from the deposits of Buryatia, the main consumer being China, where the stone is considered precious. For Russia, the proximity of China and its gigantic consumption capabilities are becoming a problem. “Illegal jade mining continues to be widespread, and recently the fight for this extremely profitable stone has resulted in armed clashes with casualties,” Deputy Prosecutor General Ivan Semchishin said in June. In Buryatia, in 2013 and four months of this year, police officers seized more than 84 tons of jade from illegal trafficking; over a year and a half in the republic and the Irkutsk region, more than 240 reports of crimes in the field of illegal jade trafficking were registered and 23 criminal cases were initiated, reported “ Interfax”. The bulk of the mined minerals are sold at prices ranging from $5 to $100 per 1 kg, the agency writes, but tens of thousands of dollars can be paid for some of the largest specimens or white stones. To decriminalize jade mining, the Ministry of Natural Resources proposed classifying jade as precious stones, which would increase liability for its illegal mining from administrative to criminal. The mineral jadeite is mined at the Borusskoye deposit, located at the junction of the Krasnoyarsk Territory and the Republic of Khakassia – it accounts for 98% of all Russian reserves of the mineral, says a representative of the Ministry of Natural Resources. Russia is the only supplier of charoite and chrome diopside to the world market, he adds. The only deposit of charoite in the world – Lilac Stone – is located on the border of the Irkutsk region and Yakutia, it was discovered in 1978, now it is being developed by Baikalquartz Samotsvety and the Yakut LLC Charoit. Together, in 2012, they extracted 81,9 tons of graded charoite. Chrome diopside is mined at the Ingalinskoye deposit in Yakutia by Vostok LLC (in 2012, 68,1 kg of cutting and 47,5 kg of cabochon raw materials). Our country has sufficient quantities of almost all types of minerals.
Iron ores are confined to the crystalline foundation of ancient platforms. There are large reserves of iron ore in the area of ​​the Kursk magnetic anomaly, where the foundation of the platform is highly elevated and covered by a sedimentary cover of relatively low thickness. This allows you to mine ore in quarries. A variety of ores are also confined to the Baltic Shield – iron, copper-nickel, apatite-nepheline (used for the production of aluminum and fertilizers) and many others. The cover of the ancient platform on the East European Plain contains various minerals of sedimentary origin. Coal is mined in the Pechora basin. Between the Volga and the Urals, in Bashkiria and Tataria, there are significant reserves of oil and gas. Large gas fields are being developed in the lower reaches of the Volga. In the north of the Caspian lowland, in the area of ​​lakes Elton and Baskunchak, rock (table) salt is mined. Large reserves of potassium and table salts are being developed in the Cis-Urals, Polesie and the Carpathian region. In many areas of the East European Plain – on the Central Russian, Volga, Volyn-Podolsk uplands – limestone, glass and construction sands, chalk, gypsum and other mineral resources are mined. Within the Siberian Platform, various deposits of ore minerals are confined to the crystalline basement. Large deposits of copper-nickel ores, cobalt and platinum are associated with the introduction of basalts. In the area where they were developed, the largest city in the Arctic, Norilsk, grew up. Reserves of gold and iron ore, mica, asbestos and a number of rare metals are associated with granite intrusions of the Aldan shield. In the central part of the platform, volcanic explosion tubes formed along narrow faults in the foundation. In Yakutia, industrial diamond mining is carried out in a number of them. In the sedimentary cover of the Siberian platform there are large deposits of coal (Yakutia). Its production increased sharply with the construction of the Baikal-Amur Railway. In the south of the platform there is the Kansko-Achinskoye brown coal deposit. In the depressions of the sedimentary cover there are promising oil and gas fields. On the territory of the West Siberian Plate, only minerals of sedimentary origin have been discovered and are being developed. The foundation of the platform lies at a depth of more than 6 thousand meters and is not yet accessible for development. The largest gas fields are being developed in the northern part of the West Siberian Plate, and oil fields are being developed in the middle. From here, gas and oil are supplied through pipelines to a number of regions of our country and the countries of Western and Eastern Europe. The most diverse in their origin and composition are mineral deposits in the mountains. The ancient folded structures of the Baikal age are associated with deposits of minerals that are similar in composition to the basement fossils of ancient platforms. In the destroyed folds of Baikal age there are gold deposits (Lena mines). Transbaikalia has significant reserves of iron ores, polymetals, cuprous sandstones, and asbestos.
The Caledonian fold structures mainly combine deposits of both metamorphic and sedimentary minerals. The folded structures of the Hercynian age are also rich in various minerals. In the Urals, iron and copper-nickel ores, platinum, asbestos, and precious and semi-precious stones are mined. Rich polymetallic ores are developed in Altai. In the depressions among the folded structures of the Hercynian age there are gigantic reserves of coal. The vast Kuznetsk coal basin is located in the spurs of the Kuznetsk Alatau. In the areas of Mesozoic folding there are deposits of gold in the Kolyma and in the spurs of the Chersky ridge, tin and base metals in the Sikhote-Alin mountains. In mountain structures of the Cenozoic age, mineral deposits are less common and they are not as rich as in mountains with more ancient folded structures. The processes of metamorphism and, consequently, mineralization were weaker here. In addition, these mountains are less destroyed and their ancient inner layers often lie at a depth that is not yet accessible for use. Of all the Cenozoic mountains, the Caucasus is the richest in minerals. Due to intense fractures of the earth’s crust and outpourings and intrusions of igneous rocks, mineralization processes occurred more intensively. Polymetals, copper, tungsten, molybdenum and manganese ores are mined in the Caucasus.

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