Diamond trade looks at direct sourcing of roughs from producers

Our Corporate Bureau
13 June 2007

Mumbai: India, the world''s largest importer of rough diamonds, has started buying diamonds directly from Russia, with an eye on sourcing from other producing countries as well to secure long-term supplies and save on purchase costs.

India buys around $8 billion worth of diamonds annually, almost all of which are exported after polishing and cutting. Most of the diamonds are bought directly from companies such as De Beers and Rio Tinto.

Reports quoting officials at the Gems and Jewellery Export Promotion Council (GJEPC) said the importers are ready to buy up to $1 billion worth of diamonds annually from Russia.

Russia lifted a system of long-term export quotas early this year and allowed unlimited exports of uncut diamonds, the platinum group metals and other precious metals and ores, subject to a licence from the economy ministry.

Russia accounts for more than 20 per cent of global diamond production, most of which is mined in Siberia.

Contracting diamond roughs from Russia was important to the Indian industry as buying directly was cheaper by 4 to 5 per cent than buying from a trading house, Also, De Beers, the main supplier of diamonds, has agreed that it will phase out purchases from Alrosa by 2009.