Alrosa has reopened its sales window for the commercial market with a number of long-term contracts signed with domestic and foreign diamond cutters, including Smolensk Kristall, and a small auction of 10.8 plus carat diamonds.

The contract diamond sales were announced by Alrosa as having been worth $150 million over the month of July; the specials sale at July 31, $13 million.

At the same time, the newly appointed chief executive Fyodor Andreyev is preparing to announce his executive team.



The first appointment is a new sales chief, Yury Okoyemov. Until now Okoyemov, one of the most experienced specialists in the company, has headed the United Selling Organization since 2001.



This internal Alrosa unit was set up on the model of De Beers's old Central Selling Organisation (CSO).



Okoyemov appears to have been promoted above Vladlen Nogovitsyn, whom outgoing CEO, Sergei Vybornov, named head of sales on July 1, before the latter's ouster.

It is unclear where in the new executive hierarchy Sergei Oulin (Uhlin) will be placed. In the past, Oulin has run Alrosa's foreign relations; more recently, he has supervised strategy and diamond marketing.



An Alrosa announcement this week, Andreyev's first, said that "last month’s sales of diamonds to the market amounted to approximately $150 million, with supplies under Long Term Contracts accounting for the largest proportion of those sales.... Also in July supplies of rough diamonds under the existing Long Term Agreement with Russia’s largest diamond manufacturer, OJSC (Production Association Kristall), were recommenced. Kristall plans to buy at least $100 million worth of ALROSA diamonds before the end of 2009. As well ALROSA will resume rough diamond supply to local diamond manufacturers in Sakha (Yakutia)."



According to Alrosa, "steady demand for large size diamond goods that has been formed in the market over the last two months allowed ALROSA to carry on with its tradition of regular international special size diamond tenders (+10,80). The results of the first such auction in 2009 were announced in Moscow on this 31st July. The auction sales volume totaled $13 million. The next auction is scheduled to take place in Antwerp, Belgium."



No details of the number and size of diamonds, nor the average carat value, have been released, making comparison with previous auctions impossible.

Alrosa has been running specials diamond auctions since 2003, and last month's auction is the 32nd in the series. It represents the smallest single sales result realized in the entire series. Until now, the lowest sales figure was $14 million earned from the auction of 7,500 carats of diamonds in the 3rd auction of the series in 2003.



The highest earner was the 22nd in the series in 2007, when 21,000 carats were sold for $45.2 million. The last regular diamond auction in the series was in September last, when the 31st in the series sold 7,700 carats for $15 million.



The average carat value of the specials Alrosa has sold over the entire series until last month was $2,034 per diamond carat.

During the interval since last September, Gokhran, the Russian government stockpile agency, conducted a specials auction from its own diamond stocks. The result of the March tendering, according to an agency source at the time, "was the worst ever diamond auction in the history of Gokhran.”



A total of 17 bidders filed, but 2 withdrew before the auction itself on March 31. Altogether, 197 lots were offered, comprising an aggregate weight of 12,136 carats. Just 43 lots were sold, with a weight of 2,116 carats of diamonds, or 17% of the offer. No data on individual diamonds have been released. The price paid totaled $4.6 million.



This compared with $13.2 million paid for 187 lots at Gokhran's previous specials auction in July of 2008. Gokhran's best result for one of these diamond sales was in November 2007, when proceeds reached $60 million.