Russian exports of diamonds are rising again after sanctions chaos

The panic that gripped the diamond world this year is starting to unwind as sanctioned Russian mining giant Alrosa PJSC has quietly revived exports to near pre-war levels.

Alrosa accounts for about a third of global rough-diamond supply, and the $80-billion industry was thrown into turmoil as cutters, polishers and traders hunted for ways to keep buying from Russia while their banks couldn’t or wouldn’t finance payments. The sudden shortage of stones sent diamond prices surging, especially for the smaller and cheaper gems that Alrosa specialises in.

Now, after months of paralysis when it was hit with US sanctions, Alrosa is back selling more than $250 million of diamonds a month, with sales only about $50 to $100 million a month below pre-war levels, according to people familiar with the matter. The sales have restarted as some Indian banks become more comfortable with how to facilitate transactions in currencies other than US dollars, said the people, who asked not to be identified discussing private information.

Most of the Russian stones are heading to manufacturers in India — the biggest among a handful of industry hubs, where hundreds of mostly family-owned businesses cut and polish rough stones into the finished products, ready to be used in earrings and engagement rings. Alrosa has been selling diamonds to buyers in India and Europe, mostly in exchange for rupees, the people said.