If you read this blog, then it is highly likely that, like us, you consume massive amounts of media every day about Russia. If that’s true, than you are probably as sick as I am of seeing these clever copy editors who think they were the very first ones to make a headline wordplay out of the James Bond movie “From Russia with Love.” I am beginning to think that the Canadians are the worst offenders – just see their hockey coverage (“From Russia with Glove“). Every time a journalist pulls this one out, I’m sure a small piece of Sean Connery dies.
Now, to make matters worse, the Russian state mining company Alrosa has started hoarding rough diamonds to corner on the market and hedge against currency risk. Now how many times are we going to have to see headline wordplay using the Bond film “Diamonds Are Forever“? Ugh… aspirin please.
Along with oil and natural gas, diamonds are another homegrown commodity that Russia has managed through politics (rather than good business sense) to varying degrees of failure. Most recently, the New York Times reported on May 11 that Russia’s diamond mining and marketing arm, Alrosa, began stockpiling rough diamonds with the government instead of selling them into a falling market. So large is the cache — an estimated 34 million carats of yearly mine production worth some $2.8 billion, or one sixth of the world total — that “Russia has become the arbiter of global diamond prices,” the Times reports.
So what does Russia want with the stones? (…)
In short, Russia’s diamonds are being held by a governmentthat can afford neither to sell them nor to buy many more — particularly ifnearly half of Alrosa’s proceeds keep going to Sakha.
It’s the kind of conundrum that only luck can fix — and itjust might. Diamond cutters, who weren’t buying anything in March and April,now say they are back in the market for rough stones of the Russian sort. Shoppersare returning to jewelry stores. Large diamond operations, especially those in India, have cutthe padlocks from their compounds and called workers back. Banks are lendingagain, albeit at reduced levels. On May 12, Alrosa announced an agreement with 15Antwerp rough-diamond dealers to sell $500 million worth of goods by year’s end.