ALROSA, a diamond production leader, reports 2018 production vol-
ume at 36.7 million (mln) carats; sales of 38.1 mln carats (down eight percent). Sales proceeds rose by six percent to USD4.5 billion (bln).

In the fourth quarter of 2018, diamond production decreased by two percent quarter-on-quarter (up two percent year-on-year) to 10.3 mln carats, driven by a seasonal suspension of production at alluvial deposits, which was almost fully offset by increased output at underground mines. In the 12 months of 2018, production declined by seven percent to 36.7 mln carats due to the shutdown of the Mir underground mine (UM) and the completion of open-pit mining at the Udachnaya pipe.

In the fourth quarter of 2018, the volume of processed ore and gravels went down 2.3 times quarter-on-quarter (up three percent year-on-year) to 7.5 mln tons. In the 12 months of 2018, it grew by three percent to 40.5 mln tons, mainly due to increased gravel processing at the Almazy Anabara alluvial deposits (up eight percent) and the Mirny division (up 10 percent). In the fourth quarter of 2018, the average diamond grade per ton of ore increased 2.3 times quarter-on-quarter (down 0.2 percent year-on-year) to 1.38 carat-per-ton (cpt).

In the 12 months of 2018, the average diamond grade was flat at 0.91 cpt. A 10-percent year-on-year decrease was mainly driven by the shutdown of the Mir underground mine in August 2017 and increased production at lower-grade assets.

Fourth-quarter rough diamond sales were 9.0 mln carats (up 34 percent quarter-on-quarter), including 5.3 mln carats of gem-quality diamonds (up 12 percent quarter-on-quarter) and 3.7 mln carats of industrial diamonds (up 87 percent quarter-on-quarter). 12-month diamond sales were 38.1 mln carats (down eight percent year-on-year), including 26.4 mln carats of gem-quality diamonds (down 12 percent year-on-year) and 11.7 mln carats of industrial diamonds (up five percent year-on-year).

Diamond inventories at the end of 2018 saw a seasonal increase of 10 percent quarter-on-quarter (down six percent year-on-year) to 17 mln carats.

In the fourth quarter of 2018, average realized prices for gem-quality diamonds fell by 23 percent quarter-on-quarter (up 10 percent year-on-year) to USD153/ct due to a lower share of large diamonds sales. In the 12 months, the average realized prices rose 21 percent to USD164/ct.

The diamond price index in 2018 gained 3.7 percent on the back of recovering diamond demand.

In value terms, fourth quarter sales declined by 13 percent quarter-on-quarter to USD845 mln (down seven percent year-on-year), with diamond sales (excluding polished diamonds) amounting to USD824 mln.

Total sales increased USD241 mln (up six percent year-on-year) to USD4,507 mln. Diamond sales rose by USD242 mln, despite lower sales in carats by eight percent.

The production outlook for 2019 is at 38 mln carats (up four percent).