ALROSA today released its Q2 2018 production performance and preliminary trading update, reporting a drop of 18% in production year-on-year to 8.5 million carats primarily on account of the closure of the Mir underground mine, a lower diamond grade at deep horizons of the International UM as well as the increased share of a lower grade ore in processing at the Jubilee pipe and the Aikhal UM of the Aikhal Division.

However, production for the quarter was up 15% as compared to the earlier quarter, the miner said, due to seasonal return to production at alluvial deposits supported by the recent ramp-up at the Udachny underground mine and Severalmaz.

ALROSA also said that the average diamond grade per tonne of ore was lower by 35% q-o-q (-18% y-o-y) to 0.84 cpt, mainly due to seasonal return to production at lower-grade alluvial deposits operated by Almazy Anabara and a lower diamond grade at alluvial deposits developed by the Mirny Division.

During the quarter, ALROSA reported rough diamond sales of 9.0 m carats (down 32% q-o-q), including 6.3 m carats of gem-quality rough diamonds (-38% q-o-q) and 2.7 m carats of industrial diamonds (-16% q-o-q).

Inventories as at the end of Q2 2018 declined by 11% q-o-q (-23% y-o-y) to 11 m carats on stable underlying demand for the entire product mix.

Average realised prices for gem-quality diamonds grew 6% q-o-q (up 18% y-o-y) to $164 per carat on the back of higher demand and cutters’ lower inventories.

Revenue from sales decreased 33% q-o-q to $1.057 bn, while polished diamond sales increased to $26.2 m: up 11% q-o-q and up 15% y-o-y.

ALROSA said that its production outlook for 2018 remained unchanged at 36.6 mn carats, a decrease of 8% y-o-y.