Russia's state stockpile agency Gokhran released details of next year's state funding for rough diamond purchases from Alrosa.



According Gokhran, the 2010 budget allocates the rouble equivalent of $1 billion for purchase of about 14 million carats of diamonds.

This is the first disclosure of the dollar and carat totals, allowing the first-ever calculation that Gokhran is paying, or plans to pay Alrosa, an average of just over $71 per carat.



Reports of this year's budget spending through Gokhran on Alrosa rough diamonds have suggested an outlay of Rb35.4 billion (currently equivalent to $1.17 billion). A clarification from Gokhran this week indicates that Rb32.5 billion ($1.1 billion) was spent on Alrosa rough diamonds, and another Rb2 billion ($66.2 million) on buying polished diamonds from the state-owned Kristall company at Smolensk.



Maxim Shkadov, chief executive of Kristall, has told PolishedPrices that this year's Gokhran purchases amounted to "about 50% of our production."



Almost unchanged, the new year's allocation suggests pessimism on the part of the federal Finance Ministry and its minister, Alexei Kudrin, who chairs the Alrosa Supervisory Board, that commercial diamond sales by Alrosa will recover much beyond this year's level.



The Gokhran official was quoted as saying: "Procurement of diamonds by Gokhran helped keep the decline in production at Alrosa to 8% [carat volume], compared to the previously planned decline of 15%."



According to Ararat Evoyan, head of the Russian Association of Diamond Manufacturers, the price paid by Gokhran to Alrosa for rough diamonds is a state secret, but he told PolishedPrices that he believes the Gokhran buying price has been higher than the depressed world market price.



The budget outlay for Gokhran to buy polished diamonds from Kristall next year will be the equivalent of $150 million for an estimated 150,000 carats, making the average price $1,000 per carat.



Next year the budget plan calls for Gokhran to sell both gold and diamonds to finance the procurement plan. Three auctions of Gokhran special diamonds are tentatively scheduled for 2010, compared to the one held this year in March, and one in July of 2008.



This year's Gokhran diamond auction netted just $4.6 million; last year's auction, $13.2 million. Two auctions in 2007 realized sales of $30 million and $60 million.