Economic news

Shares in Russia's Alrosa Drop as U.S. Expands Sanctions

April 8 (Reuters) - Moscow-listed shares of state-controlled diamond miner Alrosa were down 5% early on Friday after the United States expanded sanctions on the company, aiming to cut off additional sources of revenue for the Russian state budget. 

Alrosa, the world's largest producer of rough diamonds and which competes with Anglo American unit De Beers, produced 32.4 million carats in 2021, about 30% of the global total. It exports mostly to Belgium, India, and the United Arab Emirates.

The United States on Thursday placed Alrosa on the Specially Designated Nationals (SDN) list, which effectively kicks a sanctioned company out of the U.S. banking system and bans its trade with Americans, complicating operations in the global diamond market.

Alrosa did not reply to a Reuters' request for comment.

It employs more than 32,000 people and mines the precious stones from deposits in Russia's far east, where the climate is harsh and chances for miners to find other job are limited.

"Diamonds are one of Russia's top 10 non-energy exports by value, with exports in 2021 totalling over $4.5 billion," the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) said in a statement announcing expanded sanctions.

After Russia sent tens of thousands of troops into Ukraine on Feb. 24 in what it called a special operation, the OFAC imposed a type of sanctions on Alrosa which restricted its ability to raise new debt and equity in the United States.

Alrosa also has a 41% stake in Angolan diamond production firm Catoca, but Catoca should not be affected by the U.S. sanctions given the OFAC said only entities owned 50% or more, directly or indirectly, by Alrosa were being blocked.

Reporting by Reuters; Editing by David Holmes

Source: Reuters

To leave a comment you must or Join us

More news

Back to economic news list

By visiting our website and services, you agree to the conditions of use of cookies. Learn more
I agree