DIAMOND MINING AND ORE-DRESSING

MAJOR PRODUCT ACHIEVMENTS IN 2013

The ALROSA Group increased its production of diamonds in 2013 in size by 7.2% compared with 2012, bringing this indicator to nearly 37 million carats. The increase in diamond production in 2013 is due to three main factors:

  • The purchase of OJSC Nizhne-Lenskoe by a subsidiary of ALROSA
  • Commissioning of the central ore shoot of the Yubileynaya pipe
  • Aikhal mine reaching its design capacity.

The table below shows the basic performance of the ALROSA Group, then the results of each company of the Group are discussed in more detail.

al_god_ENG-16 Rough diamond mining by the ALROSA Group (1)

Units 2011,
report
2012,
report
2013 %
of the plan
%
over 2012
%
over 2011
plan report

Thous. carats

34,551.4

34,420.3

36,391.0

36,913.9

101.4

107.2

106.8

[1] The valuation is defined according to the current price list for diamonds

16-foto-2 Mining operations of the ALROSA Group

Units 2011,
report
2012,
report
2013 %
of the plan
%
over 2012
%
over 2011
plan report

Pre-production
mining

thous.
cub.m

757.9

706.1

1,138.5

1,081.6

95.0

153.2

142.7

Stripping

thous.
cub.m

39,763.0

44,948.9

54,850.0

55,973.0

102.0

124.5

140.8

Ore mining from
working faces
and boards

thous.
cub.m

6,683.7

8,619.6

7,997.7

8,076.7

101.0

93.7

120.8

thous.
ton

14,796.0

19,632.6

18,687.0

18,808.2

100.6

95.8

127.1

Secondary extraction

of cut-off grade ore

thous.
cub.m

954.0

50.0

275.0

458.1

166.6

916.2

48.0

thous.
ton

2,529.0

1,431.6

1,650.0

1,760.2

106.7

123.0

69.6

Sand extraction

thous.
cub.m

3,932.5

3,266.4

5,683.4

6,835.7

120.3

209.3

173.8

Extraction of tailings

thous.
cub.m

238.0

306.5

342.0

376.6

110.1

122.9

158.2

thous.
ton

405.0

568.0

650.0

715.0

110.0

125.9

176.5

Sand processing
by dredging

thous.
cub.m

841.0

1,636.0

1,570.0

1,437.0

91.5

87.8

170.9

Total rock moved

thous.
cub.m

53,170.1

59,533.5

71,856.6

74,238.7

103.3

124.7

139.6

MINING UNITS OF THE ALROSA GROUP

The main rough diamond mining and processing sites of the ALROSA Group are located in two Russian regions: the Republic of Sakha (Yakutia), where the Group carries out production from open pits, underground mines and placers, as well as in the Arkhangelsk Region in the NW of the Russian Federation, where the Group uses open pit mining. The ALROSA Group mines diamonds at six mining complexes. Four of these: Udachninsky, Aikhalsky, Mirny and Nyurbinsky mining and processing diviions are part of OJSC ALROSA. Two others: Almazy Anabara (which includes mining and processing facilities of Nizhne-Lenskoe) and Severalmaz are subsidiaries. Each mining complex consists of one or more fields, processing facilities and equipment stock.

16-foto-3 AIKHAL MINING AND PROCESSING

The Aikhal Mining and Processing Division, created in 1986, carries out diamond extraction at the following sites:

  • Yubileyny open pit mine, which began operations in 1989. The Yubileynaya diamond pipe is the largest kimberlite pipe in Western Yakutia. Currently, the field is developed by open pit mining. To JORC Code, the reserves of the Yubileynaya pipe is estimated at 107.2 million tons of ore containing 97 million carats, with average levels of diamond content of 0.90 carats per ton of ore. Given this reserves assessment and planned production quotas, production at the pipe can be ensured until 2030.
  • Komsomolsky open pit mine, which began operations in 2002. Komsomolskoye field is explored to a depth of approximately 460 m and is currently developed by open-pit method. To JORC Code, the reserves are estimated at 4.8 million tons of ore containing 1.8 million carats of diamonds at an average diamond content of 0.37 carats per ton of ore. The average weight of diamonds mined in this field is 1.5 to 2 times higher than the one of diamonds extracted from the Yubileynaya and Aikhal pipes. According to the currently implemented production plan, the field shall be exploited until 2020.
  • Aikhal underground mine, commissioned in 2005 and with the program for the design capacity increase up to 500 tons of ore per year completed in 2012. The development of Aikhal pipe by open pit began in 1961, and in 1997 the pit reached its ultimate depth of 305 m. After the decommissioning of the pit in 1997, the Group started pilot mining aimed at future underground mining. The first starter equipment of the underground mine was commissioned in 2005, and the second one, with a design capacity of 250 thousand tons of ore, in 2009. In 2012, the mine reached its design capacity of 500 thousand tons of ore per year.

Ore mined by the Aikhal Mining and Processing Division is processed at the Processing Plants number 8 and number 14, the design capacity of which is 1.7 million tons of ore and 10 million tons of ore per year, respectively. In 2013, Aikhal Mining and Processing Division demonstrated more than 35% increase in production compared to 2012. First of all, this is due to the commissioning of the central ore shoot of the Yubileynaya pipe and the fact that Aikhal mine has reached its design capacity. KPI of Aikhal Mining and Processing Division for 2013 compared with the plan and with the results from previous years are shown in the following tables.

al_god_ENG-17 Rough diamond mining (2)

Units 2011,
report
2012,
report
2013 %
of
the plan
%
over
2012
%
over
2011

plan

report

Thous. carats

5,261.9

8,945.1

12,080.0

12,087.7

100.1

135.1

229.7

[2] The valuation is defined according to the current price list for diamonds

Mining activities

Designation Units 2011,
report
2012,
report
2013 %
of
the plan
%
over 2012
%
over 2011

plan

report

KOMSOMOLSKY

open pit

Pre-production
mining

thous.
cub.m

40.0

30.0

10.0

10.0

100.0

33.3

25.0

Stripping

thous.
cub.m

3,100.0

4,450.0

4,520.0

4,520.0

100.0

101.6

145.8

Ore mining

thous.
cub.m

500.0

216.3

thous.
ton

1,200.0

520.0

Total rock moved

thous.
cub.m

3,640.0

4,696.3

4,530.0

4,530.0

100.0

96.5

124.5

AIKHAL mine

Pre-production
mining

linear m

1,390.0

900.0

1,200.0

1,200.0

100.0

133.3

86.3

thous.
cub.m

25.7

17.1

22.3

22.3

100.0

130.4

86.8

Ore mining

thous.
cub.m

108.4

215.7

230.2

230.6

100.2

106.9

212.7

thous.
ton

250.0

500.0

536.0

536.0

100.0

107.2

214.4

Total rock moved

thous.
cub.m

134.1

232.8

252.5

252.9

100.2

108.6

188.6

YUBILEYNY open pit

Pre-production
mining

thous.
cub.m

100.0

60.0

60.0

60.0

100.0

100.0

60.0

Stripping

thous.
cub.m

10,100.0

10,000.0

10,500.0

10,500.0

100.0

105.0

104.0

Ore mining

thous.
cub.m

3,715.0

4,719.0

3,618.0

3,622.0

100.1

76.8

97.5

thous.
ton

8,000.0

10,382.0

8,100.0

8,114.0

100.2

78.2

101.4

Secondary extraction

of cut-off grade ore

thous.
cub.m

528.0

thous.
ton

1,241.0

Total rock moved

thous.
cub.m

14,443.0

14,779.0

14,178.0

14,182.0

100.0

96.0

98.2

TOTAL FOR AIKHAL MINING AND PROCESSING DIVISION

Pre-production
mining

thous.
cub.m

165.7

107.1

92.3

92.3

100.0

86.2

55.7

Stripping

thous.
cub.m

13,200.0

14,450.0

15,020.0

15,020.0

100.0

103.9

113.8

Ore mining

from working faces
and boards

thous.
cub.m

4,323.4

5,151.0

3,848.2

3,852.6

100.1

74.8

89.1

thous.
ton

9,450.0

11,402.0

8,636.0

8,650.0

100.2

75.9

91.5

Secondary extraction

of cut-off grade ore

thous.
cub.m

528.0

thous.
ton

1,241.0

Total rock moved

thous.
cub.m

18,217.1

19,708.1

18,960.5

18,964.9

100.0

96.2

104.1

MIRNY MINING AND PROCESSING DIVISION

Mirny Mining and Processing Division was founded by the predecessor of the ALROSA Group in 1957 and is the oldest mining and processing enterprise of the company. The division develops Mir and Internatsionalnaya diamond pipes by underground mining and mines for diamond at several placer deposits:

  • Internatsionalny mine began to produce in 1999 in the Internatsionalnoye field. To JORC Code, the reserves of Internatsionalny underground mine with high diamond content of approximately 8.09 carats per ton are enough to maintain production until 2022 at a rate of 500 thousand tons of ore per year.
  • Mir underground mine was commissioned in 2009 to develop the Mir field. To JORC Code, the reserves of Mir mine with diamond content of approximately 3.29 carats per ton are enough to maintain production until 2043, with a design capacity of 1 million tons of ore per year. At the moment, the capacity of the mine is 500 thousand tons of ore per year. Work is underway to reach the design level of 1 million tons of ore per year.
  • Placer deposits developed by Mirny Mining and Processing Division include Irelyakh, Vodorazdelnye Galechniki, Gornoye and Levoberezhnoye. The technogenic deposit “Tailings of the Processing Plant Number 5” is also developed.

Ore extracted from Mir and Internatsionalny underground mines, as well as alluvial sands of Mirny Mining and Processing Division are processed at the processing plant number 3 with a design capacity of 2 million tons of ore per year. In addition, Mirny Mining and Processing Division also uses three dredges to process diamond-bearing gravels of placer deposits. Production decline of Mirny Mining and Processing Division in 2013 in size compared with the previous report period amounted to 15.5%. In 2012, the ore mined at the Internatsionalnaya pipe by open pit back in 2010 has been fully enriched. Quite naturally, the decline in diamond production at the site continued in 2013. KPI of Mirny Mining and Processing Plant for 2013 compared with the plan and with the results from previous years are shown in the following tables.

al_god_ENG-18 Rough diamond mining (3)

Units plan 2011,
report
2012,
report
2013 %
of the plan
%
over 2012
%
over 2011

plan

report

Thous. carats

8,137.9

8,707.5

7,360.0

7,361.1

100.0

84.5

90.5

[3] The valuation is defined according to the current price list for diamonds

Mining activities

Designation Units

2011,
report

2012,
report

2013

%
of the plan

%
over 2012

%

over 2011

plan

report

MIR mine

Pre-production mining
(open pit)

thous.
cub.m

5.0

5.0

5.0

5.0

100.0

100.0

Pre-production
mining (underground)

linear m

1,958.0

1,705.0

3,004.0

3,247.0

108.1

190.4

165.8

thous.
cub.m

42.0

38.0

65.7

68.8

104.7

181.1

163.8

Ore mining

thous.
cub.m

142.8

209.4

313.0

268.4

85.8

128.2

188.0

thous.
ton

340.0

497.0

751.0

639.0

85.1

128.6

187.9

Total ore

thous.
cub.m

142.8

209.4

313.0

268.4

128.2

188.0

thous.
ton

340.0

497.0

639.0

128.6

187.9

Total rock moved

thous.
cub.m

189.8

252.4

383.7

342.2

89.2

135.6

180.3

INTERNATSIONALNY underground mine

Pre-production mining

linear m

853.0

740.0

718.0

743.0

103.5

100.4

87.1

thous.
cub.m

19.2

18.0

18.0

18.0

100.0

100.0

93.8

Ore mining

thous.
cub.m

207.7

212.3

208.0

214.4

103.1

101.0

103.2

thous.
ton

500.0

515.0

500.0

520.0

104.0

101.0

104.0

Total rock moved

thous.
cub.m

226.9

230.3

226.0

232.4

102.8

100.9

102.4

INTERNATSIONALNY open pit

Pre-production mining

thous.
cub.m

24.0

Stripping

thous.
cub.m

275.0

Ore mining

thous.
cub.m

162.3

thous.
ton

383.0

Total rock moved

thous.
cub.m

461.3

PLACER DEPOSITS

VODORAZDELNYE GALECHNIKI

Pre-production mining

thous.
cub.m

5.0

5.0

Stripping

thous.
cub.m

30.0

30.0

Sand extraction

thous.
cub.m

5.0

30.0

40.0

40.0

100.0

133.3

thous.
ton

10.0

60.0

80.0

80.0

100.0

133.3

Total rock moved

thous.
cub.m

5.0

30.0

75.0

75.0

100.0

250.0

IRELYAKHSKAYA PLACER

Pre-production mining

thous.
cub.m

1.0

27.0

27.0

100.0

Stripping

thous.
cub.m

65.0

160.0

160.0

100.0

Sand extraction

thous.
cub.m

5.0

150.0

150.0

155.8

103.9

103.9

thous.
ton

10.0

287.0

285.0

296.0

103.9

103.1

Total rock moved

thous.
cub.m

5.0

216.0

337.0

342.8

101.7

158.7

LEVOBEREZHNAYA

Sand extraction

thous.
cub.m

15.0

20.5

thous.
ton

30.0

41.0

Total rock moved

thous.
cub.m

15.0

20.5

PLACERS PROCESSED BY DREDGING

DREDGE no. 201

Pre-production mining

thous.
cub.m

20.0

15.0

15.0

15.0

100.0

100.0

75.0

Sand processing

thous.
cub.m

354.0

484.0

520.0

456.0

87.7

94.2

128.8

Total rock moved

thous.
cub.m

374.0

499.0

535.0

471.0

88.0

94.4

125.9

DREDGE no. 202

Pre-production mining

thous.
cub.m

40.0

40.0

100.0

Sand processing

thous.
cub.m

585.0

650.0

600.0

92.3

Total rock moved

thous.
cub.m

585.0

690.0

640.0

92.8

DREDGE no. 203

Pre-production mining

thous.
cub.m

165.0

150.0

210.0

150.0

71.4

100.0

90.9

Stripping

thous.
cub.m

150.0

150.0

130.0

85.0

65.4

56.7

56.7

Sand processing

thous.
cub.m

487.0

567.0

400.0

381.0

95.3

67.2

78.2

Total rock moved

thous.
cub.m

802.0

867.0

740.0

616.0

83.2

71.0

76.8

Tailings of Processing Plant

Number 5

Extraction of tailings

thous.
cub.m

238.0

306.5

342.0

376.6

110.1

122.9

158.2

thous.
ton

405.0

568.0

650.0

715.0

110.0

125.9

176.5

Total rock moved

thous.
cub.m

238.0

306.5

342.0

376.6

110.1

122.9

158.2

TOTAL FOR MIRNY MINING AND PROCESSING DIVISION

Pre-production mining

thous.
cub.m

275.2

227.0

385.7

328.8

85.2

144.8

119.5

Stripping

thous.
cub.m

425.0

215.0

320.0

275.0

85.9

127.9

64.7

Ore mining from
working faces

thous.
cub.m

512.8

421.7

521.0

482.8

92.7

114.5

94.1

thous.
ton

1,223.0

1,012.0

1,251.0

1,159.0

92.6

114.5

94.8

Sand extraction

thous.
cub.m

25.0

200.5

190.0

195.8

103.1

97.7

thous.
ton

50.0

388.0

365.0

376.0

103.0

96.9

Extraction of tailings

thous.
cub.m

238.0

306.5

342.0

376.6

110.1

122.9

158.2

thous.
ton

405.0

568.0

650.0

715.0

110.0

125.9

176.5

Sand processing by dredging

thous.
cub.m

841.0

1,636.0

1,570.0

1,437.0

91.5

87.8

170.9

Total rock moved

thous.
cub.m

2,317.0

3,006.7

3,328.7

3,096.0

93.0

103.0

133.6

UDACHNY MINING AND PROCESSING DIVISION

Udachny Mining and Processing Division develops Udachnaya and Zarnitsa pipes located in the western Yakutia:

  • Udachny open pit, which started production in 1971. Given that the open pit mine reached its design depth, it is assumed that production there would be terminated in 2014.
  • Zarnitsa open pit, commissioned in 1999. Diamond content in this field is much lower than at Udachnoye, but the profitability of this pit is ensured through the use of existing processing infrastructure of Udachny open pit.

In addition to the existing workings, Udachny Mining and Processing Division is currently constructing the new Udachny underground mine. It is assumed that the mine will be operational in 2014 and will replace the Udachny open pit. In the first phase, its capacity shall be 1.475 million tons per year, and by 2019 the mine shall reach full capacity of 4 million tons of ore per year. Ore mined from Udachny and Zarnitsa open pits is processed at the processing plant number 12, the design capacity of which reaches 11 million tons of ore per year. Diamond production at the Udachny Mining and Processing Division in 2013 in size decreased by 16.3% compared with 2012. However, the diamond production indicator in value has almost not changed. This is due to the fact that in 2013, the facility actively enriched ore from the Eastern ore body, which is characterized by lower average content but relatively higher average price of a carat. KPI for Udachny Mining and Processing Division in 2013 compared with the plan and the results of previous years are shown in the following tables.

al_god_ENG-20 Rough diamond mining (4)

Units plan 2011,
report
2012,
report
2013 %
of the plan
%
over 2012
%
over 2011

plan

report

Thous. carats

10,582.9

5,845.2

4,890.0

4,891.5

100.0

83.7

46.2

[4] The valuation is defined according to the current price list for diamonds

Mining activities

Designation Units 2011,
report
2012,
report

2013

%
of the plan

%
over 2012

%
over 2011

plan

report

UDACHNY open pit

Pre-production mining

thous.
cub.m

5.0

5.0

5.0

5.0

100.0

100.0

100.0

Stripping

thous.
cub.m

2,084.0

1,283.0

80.0

83.0

103.8

6.5

4.0

Ore mining

thous.
cub.m

193.5

1,294.4

1,812.0

1,855.2

102.4

143.3

958.8

thous.
ton

480.0

3,385.0

4,800.0

4,889.0

101.9

144.4

1,018.5

Total rock moved

thous.
cub.m

2,282.5

2,582.4

1,897.0

1,943.2

102.4

75.2

85.1

ZARNITSA open pit

Pre-production mining

thous.
cub.m

10.0

10.0

100.0

Stripping

thous.
cub.m

465.0

210.0

850.0

612.0

72.0

291.4

Ore mining

thous.
cub.m

438.2

437.6

429.0

434.6

101.3

99.3

thous.
ton

1,005.0

1,002.0

1,000.0

1,000.0

100.0

99.8

Total rock moved

thous.
cub.m

903.2

647.6

1,289.0

1,056.6

82.0

163.2

TOTAL FOR UDACHNY MINING AND PROCESSING DIVISION

Pre-production mining

thous.
cub.m

5.0

5.0

15.0

15.0

100.0

300.0

300.0

Stripping

thous.
cub.m

2,549.0

1,493.0

930.0

695.0

74.7

46.6

27.3

Ore mining

thous.
cub.m

631.7

1,732.0

2,241.0

2,289.8

102.2

132.2

362.5

thous.
ton

1,485.0

4,387.0

5,800.0

5,889.0

101.5

134.2

396.6

Total rock moved

thous.
cub.m

3,185.7

3,230.0

3,186.0

2,999.8

94.2

92.9

94.2

NYURBA MINING AND PROCESSING DIVISION

Nyurba Mining and Processing Division, one of the youngest mining and processing facilities of the Group, operates at the Nakynskoye ore field, extracting diamonds from ore and sand of Nyurbinskaya pipe. In particular, the division develops at the following sites:

  • Nyurbinsky open pit, full-scale operation of which began in 2002. Currently, the field is developed by open-pit method. In 2013, the approximate depth of field development was 255 m, and the analysis of design solutions suggests that opencast mining can be carried out to a depth of approximately 570 m.
  • Botuobinsky open pit, currently under construction. Botuobinskaya diamond pipe was discovered in 1994, 3.3 km SW of Nyurbinskaya pipe. The construction of Botuobinsky open pit was launched in 2012 to compensate for the depletion of Nyurbinskoye field. The construction of the open pit is expected to be completed in 2014, and ore mining will begin in 2015. The Botuobinskaya pipe will be developed openly.
  • Alluvial placers located near the Nyurbinsky open pit. The alluvial placers near the Botuobinsky open pit are expected to be developed a few years after the start of production in the open pit.

Ore and sands from the Nyurba Mining and Processing Division are processed at the processing plants number 15 and number 16 with design capacities of 0.5 and 1.4 million tons of ore, respectively. All the work at these sites is carried out by Nyurba MPD of the Group under service contracts with the Group’s subsidiary ALROSA-Nyurba, which holds the license for exploration and production. As of June 30, 2013, the Group owned 87.5% stake in ALROSA-Nyurba, 10% were owned by the Ministry of State Property and Land Relations of Yakutia, and the remaining shares by other legal entities and individuals. Diamond mining by Nyurba Mining and Processing Division decreased in 2013 in size by almost 7%. This indicator reflects the planned reduction in mining and concentration of ore from the Nyurbinskaya pipe. KPI of Nyurba MPD for 2013 in comparison with the plan and the results of previous years are shown in the following tables.

al_god_ENG-21 Rough diamond mining (5)

Units

2011,
report
2012,
report
2013 %
of the plan
%
over 2012
%
over 2011

plan

report

Thous. carats

7,477.6

7,955.9

7,400.0

7,406.8

100.1

93.1

99.1

[5] The valuation is defined according to the current price list for diamonds

Mining activities

Designation Units 2011,
report
2012,
report
2013 %
of
the plan
%
over
2012
%
over 2011

plan

report

NYURBINSKY open pit

Pre-production mining

thous.
cub.m

20.0

51.0

20.0

20.0

100.0

39.2

100.0

Overburden stripping

thous.
cub.m

10,420.0

12,000.0

12,000.0

12,000.0

100.0

100.0

115.2

Ore mining

thous.
cub.m

571.8

591.9

562.5

562.5

100.0

95.0

98.4

thous.
ton

1,350.0

1,400.0

1,350.0

1,350.0

100.0

96.4

100.0

Sand extraction

thous.
cub.m

762.1

252.1

83.4

83.4

100.0

33.1

10.9

thous.
ton

1,608.0

532.0

176.0

176.0

100.0

33.1

10.9

Total rock moved

thous.
cub.m

11,773.9

12,895.0

12,665.9

12,665.9

100.0

98.2

107.6

BOTUOBINSKY

open pit

Capital mining

thous.
cub.m

5,500.0

5,500.0

100.0

Total rock moved

thous.
cub.m

5,500.0

5,500.0

100.0

TOTAL FOR NYURBA MINING AND PROCESSING DIVISION

Pre-production mining

thous.
cub.m

20.0

51.0

20.0

20.0

100.0

39.2

100.0

Overburden stripping

thous.
cub.m

10,420.0

12,000.0

17,500.0

17,500.0

100.0

145.8

167.9

Ore mining

thous.
cub.m

571.8

591.9

562.5

562.5

100.0

95.0

98.4

thous.
ton

1,350.0

1,400.0

1,350.0

1,350.0

100.0

96.4

100.0

Sand extraction

thous.
cub.m

762.1

252.1

83.4

83.4

100.0

33.1

10.9

thous.
ton

1,608.0

532.0

176.0

176.0

100.0

33.1

10.9

Total rock moved

thous.
cub.m

11,773.9

12,895.0

18,165.9

18,165.9

100.0

140.9

154.3

OJSC ALMAZY ANABARA

Almazy Anabara, a subsidiary of the Group, is engaged in diamond mining at placer deposits located near the rivers and creeks in the Anabarskiy district of Yakutia. Besides the fields originally belonging to the enterprise, Almazy Anabara mining complex currently also develops a group of placer deposits through its subsidiary Nizhne-Lenskoe. Details of the operating results of Almazy Anabara given in this section exclude the results of Nizhne-Lenskoe whose separate description is provided lower. Almazy Anabara operates placer deposits along the rivers that make up the basin of Anabar River. In 2012, the company also worked at the Kholomolokh deposit, mining at which is planned to be completed in 2014. On the assumption that the contribution of reserves of these deposits in the total reserves of the Group is unlikely to be significant, their evaluation to JORC classification was not carried out. Exceptions are placer deposits at the river Ebelyakh and Gusiny creek, where pilot works were carried out in 2012. Diamond production of Almazy Anabara grew ​​in 2013 in size by 4.7% compared with 2012. This increase was due to the growth of concentration volumes by 492 thousand cubic meters. Key performance indicators of Almazy Anabara are shown in the following tables.

al_god_ENG-22 Rough diamond mining (6)

Units 2011,
report
2012,
report
2013 %
of the plan
%
over 2012
%
over 2011

plan

report

Thous. carats

2,534.4

2,408.0

2,300.0

2,521.3

109.6

104.7

99.5

[6] The valuation is defined according to the current price list for diamonds

Mining activities

Designation Units 2011,
report
2012,
report
2013 %
of
the plan
%
over
2012

%
over 2011

plan

report

KHOLOMOLOKH

Pre-production mining

thous.
cub.m

52.0

84.0

Stripping

thous.
cub.m

709.3

471.0

Sand extraction

thous.
cub.m

679.3

478.2

Total rock moved

thous.
cub.m

1,440.6

1,033.2

EBELYAKH

Pre-production mining

thous.
cub.m

20,6

Stripping

thous.
cub.m

132,3

Sand extraction

thous.
cub.m

113.0

Total rock moved

thous.
cub.m

265.9

GUSINY

Pre-production mining

thous.
cub.m

20.7

Stripping

thous.
cub.m

81.3

Sand extraction

thous.
cub.m

100.5

Total rock moved

thous.
cub.m

202.5

ISTOK

Pre-production mining

thous.
cub.m

26.0

50.0

50.0

100.0

192.3

Stripping

thous.
cub.m

318.8

299.4

625.0

800.2

128.0

267.3

251.0

Sand extraction

thous.
cub.m

446.0

252.7

470.0

553.0

117.7

218.8

124.0

Total rock moved

thous.
cub.m

790.8

552.1

1,145.0

1,403.2

122.6

254.2

177.4

CREEK no. 41

Pre-production mining

thous.
cub.m

100.0

62.0

Stripping

thous.
cub.m

834.1

848.7

Sand extraction

thous.
cub.m

470.5

326.2

2.4

0.7

0.5

Total rock moved

thous.
cub.m

1,404.6

1,236.9

2.4

0.2

0.2

MORGOGOR

Pre-production mining

thous.
cub.m

55.0

78.6

200.0

200.0

100.0

254.5

363.6

Stripping

thous.
cub.m

858.9

1,385.5

2,715.0

3,074.7

113.2

221.9

358.0

Sand extraction

thous.
cub.m

698.7

781.2

1,425.0

1,653.4

116.0

211.6

236.6

Total rock moved

thous.
cub.m

1,612.6

2,245.3

4,340.0

4 928.1

113.6

219.5

305.6

KURUNG-YURYAKH

Pre-production mining

thous.
cub.m

59.0

50.1

60.0

60.0

100.0

119.8

101.7

Stripping

thous.
cub.m

1,461.9

1,792.7

2,460.0

2,680.1

108.9

149.5

183.3

Sand extraction

thous.
cub.m

850.9

762.0

905.0

1,266.7

140.0

166.2

148.9

Total rock moved

thous.
cub.m

2,371.8

2,604.8

3,425.0

4,006.8

117.0

153.8

168.9

TOTAL FOR OJSC ALMAZY ANABARA

Pre-production mining

thous.
cub.m

292.0

316.0

310.0

310.0

100.0

98.1

106.2

Stripping

thous.
cub.m

4,183.0

5,010.9

5,800.0

6,555.0

113.0

130.8

156.7

Sand extraction

thous.
cub.m

3,145.4

2,813.8

2,800.0

3,475.5

124.1

123.5

110.5

Total rock moved

thous.
cub.m

7,620.4

8,140.7

8,910.0

10,340.5

116.1

127.0

135.7

OJSC NIZHNE-LENSKOE

The company Nizhne-Lenskoe was established in 1994 and acquired in the first half of 2013 by Almazy Anabara. Nizhne-Lenskoe is engaged in diamond mining at alluvial deposits and has a license to develop four mining allotments and two exploration allotments in remote areas of Northern Yakutia. Placer deposits are developed along two major rivers:

  • Placer deposit at Billyakh River, which includes Tiglikit and Reliktovy mines. Full-scale mining at Billyakh River started in 2003.
  • Placer deposit at Molodo River, which became operational in 1997.

Since the acquisition of Nizhne-Lenskoe, the ALROSA Group has already taken a number of steps aimed at improving the profitability of the company and is now looking at how to maximize synergies from the deal. For example, the Group believes that the company would use the mobile processing facilities of Almazy Anabara in course of development at mining facilities of Nizhne-Lenskoe. Currently, sands extracted from the mines of Bilyakh River are processed on three seasonal plants located at Bilyakh, Reliktovy and Tiglikit mines, as well as at four AG mills. These mills prepare a concentrate which is then transported by trucks to the seasonal processing plants. The design capacity of the plant at Reliktovy mine is 370,000 cubic meters per year, while that of the facilities at Bilyakh and Tiglikit mines is 400,000 cubic meters per year. Diamond-bearing sands mined from the Molodo River are processed at one seasonal processing plant with a design capacity of 400,000 cubic meters per year. Key performance indicators of Nizhne-Lenskoe in comparison with the plan are given in the following tables.

Rough diamond mining (7)

Units plan

2013

% of the plan

Thous. carats

1,731.0

2,009.8

116.1

[7] The valuation is defined according to the current price list for diamonds

Mining activities

Designation plan

Units report

2013

% of the plan

MOLODO

Stripping

thous.
cub.m

700.0

744.0

106.3

Sand extraction

thous.
cub.m

600.0

738.0

123.0

Total rock moved

thous.
cub.m

1,300.0

1,482.0

114.0

TIGLIKIT

Pre-production mining

thous.
cub.m

200.0

169.2

84.6

Stripping

thous.
cub.m

1,235.0

1,615.4

130.8

Sand extraction

thous.
cub.m

1,050.0

1,281.0

122.0

Total rock moved

thous.
cub.m

2,485.0

3,065.6

123.4

RELIKTOVY

Stripping

thous.
cub.m

220.0

250.6

113.9

Sand extraction

thous.
cub.m

380.0

465.0

122.4

Total rock moved

thous.
cub.m

600.0

715.6

119.3

KHARA-MAS

Stripping

thous.
cub.m

46.0

Sand extraction

thous.
cub.m

105.0

Total rock moved

thous.
cub.m

151.0

BILLYAKH

Pre-production mining

thous.
cub.m

115.5

146.3

126.7

Stripping

thous.
cub.m

825.0

731.0

88.6

Sand extraction

thous.
cub.m

580.0

492.0

84.8

Total rock moved

thous.
cub.m

1,520.5

1,369.3

90.1

TOTAL FOR OJSC NIZHNE-LENSKOE

Pre-production mining

thous.
cub.m

315.5

315.5

100.0

Stripping

thous.
cub.m

2,980.0

3,387.0

113.7

Sand extraction

thous.
cub.m

2,610.0

3,081.0

118.0

Total rock moved

thous.
cub.m

5,905.5

6,783.5

114.9

OJSC SEVERALMAZ

Severalmaz, 99.6% of which is owned by ALROSA, develops the Lomonosovskoye deposit in the Arkhangelsk region. The company is working on two projects:

  • Arkhangelsky open pit, which started production in 2005. The pit is investigated to a depth of approximately 1,000 meters. To JORC Code, the reserves of Arkhangelskaya pipe are estimated at 57.1 million tons of ore containing 43.2 million carats with an average diamond content of 0.76 carats per ton. The JORC reserves of Arkhangelsky open pit are expected to last until 2033. The field is developed by opencast mining.
  • Karpinskogo-1 open pit, which is under construction and shall begin producing in 2015. The Company is building this pit to develop the diamond pipe Karpinskogo-1, which, together with Arkhangelskaya pipe, is part of Lomonosovskoye deposit. The pipe named after Karpinsky-1 is studied to a depth of approximately 942 m. To JORC Code, the reserves of the pipe are estimated at 18.4 million tons of ore containing 20.9 million carats of diamonds at an average grade of 1.13 carats per ton. Based on the estimated reserves and production schedule, the reserves of the open pit will be depleted by 2033. The pit is developed by opencast mining.

Ore mined at the Lomonosovskoye kimberlite field, is currently processed at the processing plant number 1, which was launched in 2005 and has a design capacity of 1 million tons of ore per year. It is assumed that by 2015 a second production line of the company will reach its design capacity of 3 million tons of ore per year.In 2013, Severalmaz showed a nearly 14% increase in diamond production in size compared with the previous reporting period. The commissioning of a second concentrator module in 2014 will increase the enrichment capacities. In addition, there was an increase in the average diamond content of the ore, which confirmed the previously obtained exploration data. Key performance indicators of Severalmaz for 2013 compared with the plan and the results from previous years are shown in the following tables.

al_god_ENG-24 Rough diamond mining

Units plan 2011,
report
2012,
report
2013 %
of
the plan
%
over
2012
%
over
2011

Thous. carats

556.8

558.6

630.0

635.7

100.9

113.8

114.2

Mining activities

Designation plan Units report 2011,
report
2012,
report
2013 %
of
the plan
%
over
2012
%
over
2011
Capital mining

thous.
cub.m

1,311.0

4,244.0

4,592.0

4,888.0

106.4

115.2

372.8

Stripping

thous.
cub.m

7,675.0

7,536.0

7,708.0

7,653.0

99.3

101.6

99.7

Ore mining

thous.
cub.m

644.0

723.0

825.0

889.0

107.8

123.0

138.0

thous.
ton

1,288.0

1,431.6

1,650.0

1,760.2

106.7

123.0

136.7

Secondary extraction

of cut-off grade ore

thous.
cub.m

426.0

50.0

275.0

458.1

166.6

916.2

107.5

thous.
ton

852.0

100.0

550.0

913.1

166.0

913.1

107.2

Total rock moved

thous.
cub.m

10,056.0

12,553.0

13,400.0

13,888.1

103.6

110.6

138.1