Russia’s Alrosa, the world’s largest producer of rough diamonds by volume, is considering suspending some production and cutting staff in 2025 as it confronts low global prices. CEO Pavel Marinychev announced these potential changes on Thursday, highlighting the severe challenges facing the diamond industry.
Marinychev described the global diamond market as being in a “deep crisis,” with prices declining for the second consecutive year. This situation is further complicated for Alrosa by a ban on Russian diamond sales to G7 and EU countries due to Western sanctions.
He indicated that certain less profitable operations might be suspended during this challenging period, noting, “Certain areas that are at the borderline of profitability may be subject to suspension.” However, he reassured that production in these areas could be quickly resumed if market conditions improve.
“We are currently in a rather difficult situation. Our task is to endure and wait out this period, to wait for prices to start rising again,” Marinychev stated. He mentioned that the Russian government occasionally purchases diamonds from Alrosa through a state fund to help stabilize the company.
In addition to production cuts, Marinychev announced plans to reduce labor costs by 10% over the next year. This reduction will involve some layoffs from Alrosa’s workforce of 35,000, although he did not provide specific numbers regarding the extent of the cuts.