Russia stopped production in one of the largest diamond deposits due to billions in losses.
Russian diamond mining company Alrosa has suspended production at several fields to cut costs, the company's chief executive Pavel Marynichev said on Monday.
According to him, the freeze included the deposits of the subsidiary Almazi Annabara, which is the largest venture in the world for mining diamonds in alluvial deposits and produces 11% of all the diamonds of the Alrosa group.
"We have stopped production in our less profitable fields, we are optimizing our costs," Marynichev explained (he was quoted by RIA Novosti).
This year, Alrosa, which is one-third owned by Rozimushchestvo and another 25% by the Yakutia government, became unprofitable for the first time in 6 years. At the end of the first half of the year, the company lost 9.5 billion rubles, according to the IFRS report.
Alrosa's revenue fell 33% year-on-year, EBITDA fell 61% to 14.3 billion rubles, and free cash flow (the difference between inflows and outflows) turned negative. In the first half of the year, Alrosa's cash gap amounted to 16.9 billion rubles, and in the last 12 months - 33.2 billion.
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