EU Sanctions Impact Global Diamond Industry and Russian Economy in 2024

EU Sanctions Impact Global Diamond Industry and Russian Economy

EU Imposes Sanctions on Alrosa

The Moscow Times has claimed that sanctions have been imposed by the European Union on Russia. The import of Russian diamonds is prohibited as part of these sanctions. Remarkably, the Russian diamond mining corporation Alrosa has avoided the recently enforced penalties.

Alrosa market share diamond mining

According to Statista, Alrosa, the large Russian diamond mining company, controlled a sizeable 30% of the global diamond supply in 2022, dominating the global diamond market share. Over the course of that year, the company produced an astounding 35.6 million carats of rough diamonds, firmly establishing itself as a front-runner among the big international diamond mining corporations.

Major diamond mining companies

Prominent entities in the worldwide diamond mining sector include:

De Beers: Currently owned by Anglo American, De Beers is a British diamond mining firm that was founded in 1888 in South Africa by Cecil Rhodes. In 2022, it had a notable 29% market share for diamond production worldwide.

Rio Tinto is a multinational mining firm with British and Australian roots that specializes in metals and mining. It is among the biggest mining companies globally. With 17.9 million carats of diamonds produced in 2020, it contributes significantly to the diamond mining industry.

Dominion Diamond Mines: Dominion Diamond Mines is a Canadian company that manages the Northwest Territories’ Diavik and Ekati diamond mines. With 6.6 million carats of diamonds produced, the business made a major contribution to the industry in 2020.

Debswana: Four diamond mines are run by Debswana, a joint venture between the De Beers Group and the government of Botswana. It will employ more people in the private sector than any other in the nation in 2020, with 23.2 million carats of diamonds produced.

History of diamond mining

Diamonds have always been a precious stone; the first ones were found in India in the fourth century BC. According to historical accounts, India was trading diamonds as early as the fourth century BC, mostly to the nation’s upper castes. India’s diamond reserves were first scarce, catering only to a niche market.

Nevertheless, something changed with time. Caravans carrying Indian diamonds and other exotic products arrived in Venice’s medieval markets and eventually found their way to Western Europe. Diamonds had evolved into stylish adornment for Europe’s upper class by the 1400s.

As the diamond reserves in India decreased in the early eighteenth century, Brazil became a major supplier. An important turning point was when gold miners sifting through local river gravels discovered diamonds in their pans. Once Brazil realized its full potential, it controlled the diamond market for more than 150 years.

The story of the contemporary diamond market begins in Africa in 1866 with the finding of diamonds in Kimberley, South Africa. By the year 1900, De Beers Consolidated Mines Limited, founded by businessman Cecil Rhodes in 1888, was thought to control ninety percent of the world’s rough diamond production.

At the moment, Dominion Diamond Mines, Rio Tinto, Debswana, Alrosa, and De Beers are the leading companies in the world of diamond mining.

EU sanctions on Russia

New sanctions against Russia have been implemented by the European Union; among them is a ban on imports of Russian diamonds. This decision is a direct reaction to Russia’s illegal annexation of the Donetsk, Luhansk, Zaporizhzhia, and Kherson regions of Ukraine, as well as its aggressive war against that country that began on February 24, 2022. The European Union’s reaction to these acts has been marked by significant and unprecedented sanctions placed on Russia.

Global diamond industry after EU sanctions on Russia

The latest restrictions imposed by the European Union on Russian diamonds, which include a ban on imports, are expected to cause havoc in the world diamond market. The Russian state-owned corporation Alrosa sources almost one-third of the world’s supply of diamonds from the Siberian area of Yakutia. The diamond industry is one of the biggest in Russia to avoid the extensive sanctions imposed by Western powers in reaction to the full-scale invasion of Ukraine in 2022, with an estimated yearly contribution to the Russian economy of $4.5 billion.

Given that Russia is one of the top producers of diamonds worldwide, it is unclear how these sanctions may affect the diamond sector. While visiting the Indian cities of Mumbai and Surat, specialists from the G7 and Belgium are now having discussions about possible penalties that would especially target diamonds mined in Russia. The way these talks turn out will be very important in deciding what the implications are for the diamond business worldwide.

Diamond industry worth

According to Statista, the global diamond jewelry market was estimated to be worth 86.5 billion US dollars in 2022. The Russian economy greatly benefits from the larger diamond industry, which contributes over 4.5 billion US dollars a year and is one of the main industries in the nation.

FQA :

How does Alrosa mine diamonds?

According to material on the firm’s official website, Alrosa is a diamond exploration, mining, production, and sales corporation. It is the top country in the world for the volume of diamonds mined, and it has easy access to the largest raw diamond reserves in the world. Alrosa is a diamond mining company that works in Africa, the Arkhangelsk region, and Western Yakutia.

The company uses a variety of mining techniques, including alluvial, underground, and open-pit mining. For deposits close to the surface, open-pit mining is used; for minerals more below the surface, underground mining methods are employed. Alluvial mining is used to extract resources from the ocean floor and riverbeds.

In order to trace diamonds, Alrosa has embraced cutting-edge technologies, such as nanomarking. The company’s nanomark, made with laser technology, is deeply etched throughout the diamond’s atomic structure and crystal lattice. This nanomark doesn’t show up unless a specialized scanner is used. Remarkably, the mark is a three-dimensional code linked to the Alrosa Provenance platform, improving traceability and transparency in the supply chain for diamonds.

Where is Alrosa located?

Alrosa is headquartered in Mirny, Sakha Republic, Russia The company also has an office in Moscow .

Where can I buy ethically sourced diamonds?

When making a purchase, there are several ways to make sure the diamonds are sourced ethically. Here are some rules to follow:

  1. Certifications: Look for diamonds that have been certified by reliable organizations like the Kimberley Process. Members of this global movement are required to guarantee that their diamonds are conflict-free.
  2. Retailer Practices: Look for merchants who go above and above the call of duty, selecting those who get their diamonds from mines that are well-known for their moral standards. A few jewelers focus on ethical sourcing and provide in-depth “journey” reports that explain where each diamond comes from.
  3. Independent Research: Choose a trustworthy diamond seller by conducting independent research. The following companies, while not official endorsements, are instances of businesses that seem to source diamonds responsibly and can act as launching pads for your own research:
  • Fair Trade Jewelry Co.: This business purchases diamonds from artisanal small-scale mines that have earned Fairtrade Foundation certification.
  • Brilliant Earth: This business chooses diamonds from mines that follow strict guidelines for the environment and labor.
  • Leibish & Co.: This business purchases diamonds from mines that adhere to stringent environmental and labor standards.
  • Vrai: This business sources diamonds from mines that adhere to strict labor and environmental regulations.

Where can I learn more about famous diamonds in history?

Numerous online resources offer insights into the historical significance of renowned diamonds. Explore the following websites for comprehensive information:

  1. The Diamond Authority: This site provides a compilation of the world’s top 10 most famous diamonds, offering detailed narratives about their history and importance.
  2. GIA (Gemological Institute of America): GIA, a reputable authority, has extensively examined some of the globe’s most celebrated diamonds, including the Hope diamond, the Dresden Green, and the Idol’s Eye. Their website offers in-depth information regarding the history and characteristics of these diamonds.
  3. BBC: The BBC features an article highlighting the 10 most iconic jewels throughout history, encompassing some of the most renowned diamonds globally. Explore their content for insights into the historical context of these precious gems.
  4. Brilliance.com Blog: This website’s blog presents a curated list of ten historically significant diamonds, delving into their individual histories and importance in the world of gemstones.

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