lrosa produced 9.9 million carats during the fourth quarter of 2013, ended December 31, 2013, an increase of 10 percent compared to the fourth quarter a year ago. The Russian mining conglomerate's diamond production for 2013 totaled 36.9 million carats, signifying a 7 percent increase compared to 2012.

The fourth-quarter production increase was primarily driven by improved ore grade at the Jubilee pipe, the acquisition of OJSC Nizhne-Lenskoye, and the Aikhal underground mine reaching its target capacity.

Operations

Alrosa's Aikhal division, which includes the Jubilee pipe, the Aikhal underground mine and the Komsomolskaya pipe produced 3.978 million carats during the fourth quarter of 2013, up 53 percent year over year. For the full 2013 year, the Aikhal division produced 12.088 million carats, a 35 percent increase compared to 2012.

The Mirny division, which includes the International underground mine, the Mir underground mine and alluvial deposits, produced 1.907 million carats during the fourth quarter of 2013, down 7 percent year over year. The division produced 8.707 million carats during 2013, a decline of 15 percent year over year.

The Udachny division, which includes the Udachnaya and Zarnitsa pipes, produced 1.430 million carats during the fourth quarter, a 24 percent decline year over year. For the full year, 4.892 million carats were produced by the Udachny division, down 16 percent year over year.

Production at the group's Nyurba division, which includes the Nyurbinskaya pipe and alluvial deposits, remained flat during the fourth quarter at 2.331 million carats. The Nyurba division's 2013 production fell 7 percent to 7.956 million carats.

Alrosa's Lomonosov division produced 213,000 carats during the fourth quarter and 636,000 carats during the full year, signifying year-over-year increases of 53 percent and 14 percent, respectively. The company's Almazy Anabara and Nizhne-Lenskoye divisions did not produce during the fourth quarter. However, production at Almazy Anabara during the full year grew 5 percent to 2.521 million carats while the group's Nizhne-Lenskoye mine produced 2.010 million carats during the 2013.

Sales Results

During the fourth quarter, the Yakutia-based miner sold 10.8 million carats of diamonds, including 6.7 million carats of gem-quality diamonds with an average price of US$192 per carat, and 4.1 million carats of industrial diamonds with an average price of US$7 per carat.

Alrosa's 2013 diamond sales totaled 38 million carats of diamonds, including 26.7 million carats of gem-quality diamonds with an average price of US$176 per carat and 11.3 million carats of industrial diamonds with an average price of US$9 per carat.

The company says that it expects its 2013 revenue under IFRS (including non-diamond revenue) to increase by around 10 percent compared to the previous year and amount to no less than US$4.727 billion (RUB165 billion).

2014 Outlook

The company notes that there were "neutral dynamics of the diamond market" during the fourth quarter of 2013 and maintains a moderately optimistic forecast for 2014. The miner expects to maintain its current levels of 36 million carats for diamond production in 2014 and 38 million carats in diamond sales, including sales of inventories of around 2 million carats.