“We foster an attitude towards diamonds as a financial instrument” – Style
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Diamond mining giant ALROSA, as part of its investment program Alrosa Diamond Exclusive, presents an exceptional collection of one and a half dozen rare stones of fancy pink color. All of them were mined and cut in Russia over the past six years. In April, the company is planning a special online auction, during which Alrosa Diamond Exclusive clients will be able to place bids and become the owner of a reliable instrument for protecting their financial investments.
— Can we say that any pink diamond is an investment diamond?
– That’s quite fair. Due to its incredible rarity, any pink diamond will increase in value. It’s another matter that one gemstone does this faster than another, but in general all pink diamonds show a significant increase in value. This became especially noticeable after the announcement of the closure of the Argyle mine in Australia, the largest supplier of pink diamonds to the world market. Russia (where pink diamonds are mined in the north of Yakutia) and Africa account for very small volumes of production. They are extremely rare and therefore very highly liquid.
— How did you manage to assemble such an exceptional collection?
— This is truly an incredible success even for such a large player as ALROSA. I have been working for the company for six years, and during this time I have had the opportunity to see the most important gemstones mined and cut by the company. We only had a few pink diamonds during this period. Among them is the famous 14.83-carat pink “Phantom of the Rose” diamond (sold in 2020 at Sotheby’s for $26.6 million); you can also remember two large pink diamonds of 9 and 3 carats – they were purchased by private collectors. And, in general, that’s all. But never before has it been possible to bring together 15 pink diamonds, two of which weigh more than three carats. The weight of the stones varies from 0.40 to 3.30 carats.
– What about the color?
— A whole range of shades of pink is presented: Pink with different degrees of saturation, pink with overtones Purple and Purplish. There is also a sample of pure bright Vivid Pink color – the stone weighs 0.92 carats and is tentatively valued at $524.4 thousand ($570 thousand per carat). The largest gemstone has a lower color index (Intense Purple Pink), but weighs 3.30 carats, so it is valued even more expensive: the price per carat is $750 thousand, and the estimate of the stone is $2.475 million. The most affordable lot (0.41 carats , Fancy Pink color) is valued at $17.2 thousand. All these stones were cut at our enterprise in Moscow: “ovals”, “cushions” and “pears” reveal the color to the maximum and visually enlarge the gemstone.
— Who can participate in the auction?
— Buyers of these diamonds can be private banking clients of Russian banks, our partners in the Alrosa Diamond Exclusive program (now there are about 20 of them, but at the beginning there were only six). Banks declare their participants (there are no restrictions on the number), place bets on an increase, and then ALROSA formalizes a deal with the winning bank. During bidding, we do not have direct contact with potential buyers – trading takes place between participants online. But before the start of bidding, we organize individual showings of lots: all participants can personally come, look and make their first bids. For our part, we provide gemological expertise and talk about the investment attractiveness and features of a particular diamond.
— Tell us about the Alrosa Diamond Exclusive program.
— In 2018, we launched the Alrosa Diamond Exclusive project to sell the largest and most valuable ALROSA diamonds in partnership with banks. Back then, with a 20% VAT, one could only talk about investments conditionally: diamonds were purchased to make jewelry or simply put in a safe. In 2022, the Ministry of Finance consistently abolished VAT on the purchase by individuals of gold and then diamonds from banks. And we began to develop Alrosa Diamond Exclusive as a full-fledged platform on which participants can not only buy, but also sell precious ALROSA assets. Diamonds are purchased from ALROSA by partner banks (and then sold to their clients) – but we offer buyback and other services to individuals, such as jewelry manufacturing or safekeeping, directly. In other words, we promote the idea of a diamond as an investment instrument, form a market, explain pricing, and carry out extensive educational work.
— What investment products do you offer?
— Our first investment offer was a diamond basket – a set of colorless diamonds of different characteristics (from 18 to 22 units) weighing from 0.3 to 1.99 carats – within each set with a total weight of more than 8 carats, all stones are brought to a single price per unit of weight . It is calculated on the basis of an aggregated index and generally corresponds to the diamond set indices on the Moscow Exchange. All this is done for the convenience of those who are ready to invest in diamonds, but who find it difficult to make a choice in favor of an individual diamond. The second option is to purchase individual investment diamonds, such as any of the 15 pink stones from our collection. The “investment” category includes large diamonds of high color quality characteristics of regular colors, which are usually called colorless, and diamonds of fancy shades, regardless of their weight. The entry threshold for both products is approximately $20 thousand in ruble equivalent.
— How does the buyback work?
— We began the practice of buying back individual stones in October 2023; the service for buying back diamond baskets is exactly one year older. It is important that only those diamonds that were purchased from ALROSA can be sold – this is part of the investment program for bank clients. For all platform participants, we guarantee the transparent origin of all diamonds presented on it, therefore, for example, we do not buy precious stones from private collections. If a private person turns to us for a redemption service, the question of authenticity immediately arises. Some people immediately leave the diamond with us after the purchase (custody service) – then a re-examination will not be required to buy it back. Otherwise, it is necessary and is done at the expense of the seller, since we need to make sure that we are purchasing the ALROSA diamond. It’s simpler with the “basket”: one of the conditions for its purchase is its storage in our safes (12 thousand rubles per year), so re-certification is not required.
— How to estimate the approximate income from a diamond investment?
— Since prices are set in dollars, and payments are made in rubles at the current Central Bank exchange rate, the purchase of a diamond can be considered a quasi-currency instrument: even in the absence of movement in diamond prices, a change in the ruble exchange rate leads to the formation of a different ruble value. For each investment diamond from our catalog on the website there are weekly charts and price indices (starting from October 2022) that will help you navigate the price movement. But diamonds are a long-term instrument for a period of 5 years or more. In general, we do not recommend short-term investments.
— What can you say about the world practice of such investment programs?
— As far as I know, other large diamond miners do not have a similar program. ALROSA takes a leading and progressive position in this matter. After all, the investment program presupposes maximum transparency, openness to the market, and understandable pricing. This approach allows us to create an attractive investment instrument that will be of interest to those who want not only to purchase a precious stone or create a beautiful piece of jewelry with it, but also to increase their capital.
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