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. Last Updated: 07/27/2016

New Diamond Mine And Factory Open

Russian diamond giant Alrosa said Friday it had opened a new ore-enrichment factory and the first underground diamond mine in Russia in Sakha, a semi-autonomous region in northern Siberia about 6,200 kilometers east of Moscow.

Alrosa, or Almazy Rossii Sakha-Yakutia, has 20 percent of the world market for raw diamonds, second only to De Beers, the South African firm that runs the diamond cartel, which has 26 percent.

The $5.5 million factory - the fourth ore-enrichment works at Alrosa - can process about 200,000 tons of diamond-bearing ore a year. It was assembled in just four months from prefabricated sections transported to the wild taiga area by helicopters. The production cycle is based on De Beers technology and is intended to operate year-round in the region where winter temperatures reach minus 50 degrees Celsius.

The new Inter mine will start out employing 700 people and it is expected to last 27 years. It will extract 150,000 tons of diamond-bearing ore in the first year, reaching 500,000 tons in three years.

The pit is based on the Internatsionalnaya kimberlite pipe, a cone of rock encasing diamonds, and penetrates 350 meters of permafrost down to about 1,000 meters. The shaft of the mine goes through powerful underground streams, and layers of salt, small oil deposits, methane and hydrogen sulfide.

"The mine has no competitors in Russia or CIS countries in terms of the collection of unfavorable factors," said Alrosa's statement released Thursday. The statement provides no figures on investment in building the mine, saying only that it was built using Alrosa's own cash. Nor does the statement provide projected volumes of diamond production at the factory.

Alrosa, which employs 36,415 people, also plans to raise production of cut diamonds from $40 million in 1999 to $150 million in 2001, the company said in a news release. The company holds stock in several Russian polished diamond enterprises, including the Kristall plants in Moscow and Smolensk.

Alrosa, which is the license holder for the Sakha deposit, controls about 83 percent of Russian diamond reserves. Its sales last year totaled $1.422 billion worth of diamonds, of which 40 percent was exported, Alexei Chertkov, Alrosa's spokesman said in an interview with The Moscow Times. It brought 5 billion rubles ($300 million) to the state coffers, about 0.7 percent of all Russian revenues.

Chertkov said that by the year 2005 the company hopes to increase sales to $2 billion a year.

Chertkov would not specify the volume of Alrosa's diamond production. The Diamond Registry bulletin in its October 1997 issue said "Russian diamond production still remains secretive" and quoted the U.S. Geological Survey as putting the figure at 12.5 million carats, while the European-based Metals and Minerals Annual review estimated it in 1996 at 18.5 million carats.