Rough diamond buyers
ALROSA ALLIANCE
Terms and conditions of participation
ALROSA’s sales policy is based on long-term contracts, struck for 3 years with major diamond producers, which have an established reputation and well-organized sales systems. Currently, 75% of all ALROSA diamonds are sold through long-term contracts. The unity of ALROSA’s long-term client’s as well as candidates for long-term diamond supplying contracts make up ALROSA ALLIANCE. Members of ALROSA ALLIANCE maintain the principles of responsible business management and receive preferences in line with clients’ status.
The principles of ALROSA ALLIANCE
In order to comply with the best practices of the diamond industry, ALROSA developed and implemented «The ALROSA ALLIANCE principles of responsible business management». This document serves as the foundation of ALROSA’s work, that of its long-term clients and other interested parties within the diamond industry — to demonstrate compliance with the high standards of business management, corporate ethics and management at all levels of supply chain. The ALROSA ALLIANCE principles ensure that its member provides safety and development of rough diamonds, diamonds produced from raw diamonds, as well as abides by the practice of separate sales of natural and synthetic diamonds.
Advantages
ALROSA’s long-term clients are guaranteed:
- Volumes and assortment of monthly diamond supplies;
- Purchases of additional volumes of various diamonds, not stipulated in the long-term agreement.
Members of ALROSA ALLIANCE
Represent a member state of the Kimberley Process, as well as adhere to all requirements and principles of the Kimberley Process and the World Diamond Council System of Warranties;
- Consider the ethical business management as integral part of the diamond industry’s overall prosperity, manage their businesses in compliance with the principles of legal and fair competition, counter bribery and corruption, ensure financial transparency and informational openness;
- Provide safety and development of rough diamonds, diamonds produced from raw diamonds, thus demonstrating its compliance with the practice of separate sales of natural and synthetic diamonds;
- Unequivocally support human rights and labor rights, displaying zero tolerance for discrimination, forced and child labor. Build relationships with employees based on principles of social partnership, maintaining safe and comfortable labor conditions, providing adequate salaries and social guarantees;
- Implement active measures on lowering the negative impact on the environment, use subsurface resources reasonably and protect the environment.
Client requirements
- Availability of registration documents;
- Having a legal right — including a special permit — to conduct operations with gemstones.
- A client is bound to perform its activities in a member-state of the Kimberley Process;
- Credible business reputation;
- Stable financial state;
- Experience in the field of raw diamonds and diamonds trading;
- Having enough funds to fulfill obligations on diamond purchases;
- Compliance with «The ALROSA ALLIANCE principles of responsible business management».
FAQ
Our company currently carries out spot transactions with ALROSA for the purchase of rough diamonds. We would also like to sign a long-term agreement. How should we proceed?
First of all, you should apply to ALROSA in writing. You should also submit the information and documents stipulated by Sections 4 and 5 of Appendix 1 to the Regulations, and update the earlier submitted documents if any changes have been made. Our company submitted all the documents and received confirmation that we comply with ALROSA’s requirements. How and when will we know that our company can enter into a long-term agreement?
Your documents are usually examined within 30 calendar days of our receiving them. If necessary, this process can be extended by up to 90 days. The , the ALROSA Market Conjuncture Analysis Panel makes a decision based on this information. The Panel meets at least once every two months . So, within 30–90 calendar days of us receiving your information, , we will send a notice of compliance/non-compliance to your company, using the e-mail or postal address you provided. Our company received a notice saying we did not qualify to become long-term buyers. Does it mean that we have no chance to enter into a long-term agreement in future?
No. You will find specific grounds for refusal in your notice. For example, we may point out that for the last three years, the average annual sales of rough and polished diamonds of your company total less than US$50 million. Once you know your grounds for refusal, you can apply again next year if this no longer applies. In any case, you can still take part in auctions and spot transactions. Our company received a notice declaring it to be in compliance with your requirements and criteria as long-term buyers. When will an agreement be signed?
Declaring a company to be in compliance with our requirements and criteria opens a ‘window of opportunity’, but does not guarantee an immediate agreement. Rough diamonds are supplied under long-term (up to three years) agreements based on an exact mathematical forecast of ALROSA’s resources (taking technological and economical limitations into account). This forecast is made to determine whether it is reasonable for ALROSA to assume obligations for guaranteed monthly supplies of pre-agreed volume and assortment of rough diamonds. The most probable dates when such a resource opportunity can appear are the termination dates of existing long-term agreements. Also, a new ‘window of opportunities’ may occur following the start-up of new diamond-mining deposits. I understand there are a number of other companies which have met the requirements to become ALROSA long-term buyers. How can we raise our chances to enter into a long-term agreement with ALROSA?
Other things being equal, we give preference to active buyers who have purchased natural rough diamonds from ALROSA, especially during slow periods on the global diamond market. Buyers are assessed using our Methodology, a strictly formalized algorithm agreed with the FAS of Russia. The most important factors we look at in a company applying for a long-term agreement are:
- Sum cost of rough diamond purchases in total, with weighting given to purchases made in weak markets (in USD)
- The share of selected (purchased) natural rough diamonds in the total volume of rough diamonds offered for sale in the trading sessions, % by value
Our company filled in document templates, attached the documents stipulated by Sections 1-5 of Appendix 1 to the Regulations, and submitted them to ALROSA (Customer Policy Center). How do we know that the submitted documents comply with ALROSA’s requirements?
In clause 1.20. of the Questionnaire, you provide details of a contact person in your company. ALROSA will send an email confirmation to this address within five working days of our receiving your application, with information on the compliance/non-compliance of the submitted documents with our requirements. Auctions and tenders
Terms and conditions of participation
ALROSA sells a considerable part of its diamonds on competitive basis, in two basic formats:
- Auctions, including electronic ones;
- Receiving competitive offers, including electronic forms.
Variety of diamonds (regular produce) as well as extra-large diamonds +10,8 carats are put on sale there. To be eligible for competitive trading, one needs to apply with ALROSA Customer Policy Center and go through the procedure of inclusion into the pool of buyers with legal right to conduct purchases and sales of diamonds (contracts).
Advantages
- Minimal requirements to participants;
- Simple and quick procedure of gaining access to trading.
Client requirements
- Availability of registration documents;
- Having a legal right — including a special permit — to conduct operations with gemstones. A client must represent a member-state of the Kimberley Process;
- Availability of registration documents.
FAQ
Our company submitted all the documents and received confirmation that these comply with your requirements. How and when do we know that our company is qualified to participate in competitive sales?
We will email or write to you within 30 calendar days from receipt of your information, giving you the decision made by ALROSA’s Competitive Sales Committee. If you have been successful, this notice will contain information about how to enter your company in the list of business entities entitled to participate in competitive sales of natural rough diamonds. We received a notice of entering our company in the List of business entities entitled to participate in competitive sales of natural rough diamonds held by ALROSA, but we did not receive an invitation to participate in competitive sales. Why?
The procedure of forming the list of participants of the next competitive sales has been worked out in keeping with the requirements of the Federal Antimonopoly Service (FAS) of Russia and approved by the FAS. Tis procedure stipulates for the following: The list of participants of the particular competitive sales is formed based on organizational and technical (technological) resources and legitimate restrictions at holding the competitive sales, with due account of:
- sufficient volume and assortment of goods from rough diamond lots offered for sale;
- requirement to the number of buyers who did not participate in the previous competitive sales to be not less than 30% of the full list of participants of the next competitive sales defined by the Committee.
Our company filled in document templates, attached the documents stipulated by Sections 1–2 of Appendix 1 to the Regulations and submitted them to ALROSA (Customer Policy Center). How do we know that the submitted documents comply with ALROSA’s requirements?
In clause 1.20. of the Questionnaire you provide details of a contact person in your company (including his/her e-mail address). Within 5 workdays confirmation of your application’s receipt and information on compliance/non—compliance of the submitted documents with the requirements of the Regulations will be sent by ALROSA to this e—mail address. Spot sales
Terms and conditions of participation
ALROSA diamonds can also be purchased through one-time non-competitive purchase and sale deals (spot sales). Diamonds are offered to clients on availability basis — without any pre-conditions on volumes and variety of supplies. To be eligible for spot sales, one needs to apply with ALROSA Customer Policy Center and receive the right to conduct purchases and sales of diamonds (contracts). Such contracts are struck on a standard basis, adopted by ALROSA. Long-term and successful experience of one-time non-competitive trading with ALROSA can lead to inclusion of a buyer into ALROSA ALLIANCE.
Advantages
- Possibility of purchasing unlimited amount of diamonds;
- Wide variety — the entirety of ALROSA’s regular produce is available to purchase at spot sales.
Client requirements
- Availability of registration documents;
- Having a legal right — including a special permit — to conduct operations with gemstones.
- A client must represent a member-state of the Kimberley Process;
- Credible business reputation;
- Stable financial state.
FAQ
Our company participates in competitive sales held by ALROSA. We would like to purchase rough diamonds under spot transactions. How should we proceed?
Apart from the documents you submitted earlier, you should also submit the information and documents stipulated by Section 3 of Appendix 1 to the Regulations. Please also update the previously submitted documents if any changes have occurred. Our company submitted all the documents and received confirmation that the documents comply with the requirements. How and when do we know that our company is qualified to conclude spot transactions for the purchase of rough diamonds with ALROSA?
The obtained information (documents) are verified within 30 calendar days upon their receipt by ALROSA. Based on the results of verification data, ALROSA Market Conjuncture Analysis Panel makes a decision. The Market Conjuncture Analysis Panel holds its meetings not less frequently than once in two months (Clause 7.8. of the Regulations). Thus, within 30–90 calendar days upon receipt by ALROSA of the information (documents), a notice of entering your company in the lists of business entities entitled to conclude spot transactions for the purchase of rough diamonds or of a motivated refusal thereof will be sent on ALROSA’s letterhead to the e-mail or postal address you provided. How can we guarantee our monthly participation in trading sessions for buyers under spot transactions?
Rough diamond supplies under spot transactions stipulate for the sale of rough diamonds based on the actual availability of the goods in stock at the sales divisions of ALROSA. The procedure of forming the List of participants of trading sessions held for conclusion of spot transactions, agreed by the FAS of Russia stipulates for the monthly rotation of the participants of trading sessions. Thus, it is impossible to guarantee participation in trading sessions (there may be insufficient stock). Nevertheless, it is important to note that if diamonds in stock are insufficient to conclude spot transactions with all the buyers who meet requirements, preference will be given to:
- The most active buyers in the previous trading sessions. Activity level is determined based on the actual data about: а) refusals to participate in trading sessions for which the invitation was sent; b) the share of contracted (selected) rough diamonds from the volume offered for purchase (selection percent); c) the cost of rough diamonds purchased under spot transactions. The share of such participants in the next trading session can reach 80% of the full list of participants.
Our company filled in document templates, attached the documents stipulated by Sections 1, 2 and 3 of Appendix 1 to the Regulations and submitted them to ALROSA (Customer Policy Center). How do we know that the submitted documents comply with ALROSA’s requirements?
In clause 1.20. of the Questionnaire you provide details of a contact person in your company (including his/her e-mail address). Within 5 workdays ALROSA will sent to this e—mail address confirmation of your application’s receipt and information on compliance/non-compliance of the submitted documents with the requirements of the Regulations. News
ALROSA reports preliminary rough and polished sales results for January 2022.
10 Feb 2022
ALROSA reports its diamond sales results for 2021
13 Jan 2022
ALROSA Hosts Regular Finance Community Meeting
21 Dec 2021