De Beers has agreed to sell its 27% stake in the Lomonosov diamond field in Russia’s arctic. The field is estimated to hold $12 billion in gems and industrial stones, but plans to develop it have stalled for many years. The decision means a $30 million write-off for De Beers and puts an end to almost ten years of investment plans.
De Beers gave no reason why it pulled out of this potentially major mine. The Russian diamond company Alrosa has purchased the stake.
The Russian media — including a reporter from Radio Free Europe — have suggested that De Beers bought the stake purposely so it would not be developed and there would not be an oversupply of stones. According to the Financial Mail, De Beers’ decision follows an ultimatum from the Russian government to invest more money in Russian diamond mining or get out of the country. But De Beers has said that it worked in good faith to develop the production.
OAO Lukoil Holding, Russia’s number one oil producer which originally ran across the deposit looking for new oil fields, has indicated that it may want to take De Beers’ place at the deposit.