ALROSA will temporarily suspend mining works at Aikhal underground mine and Zarya open pit from May 15. The decision was taken due to the decrease in demand and sales for diamonds. The reason being, the major consuming economies are struggling with economic headwinds caused by the global spread of COVID-19 virus.
Mining at Aikhal will be put on care and maintenance from May 15 to September 30, 2020, and at Zarya – from May 15 to December 31, 2020. Zarya employs 180 miners, Aikhal has 502 staff members. Part of the mine’s personnel will be involved in the maintenance and other required continuous work.
These two pipes operate with the lowest margins in the Group portfolio due to the quality characteristics of stones mined there. The decision to put them offline is aimed to reduce the accumulation of less liquid, given the current market conditions, stocks of diamonds.
Personnel of suspended operations and auxiliary services will be partially laid-off. The remaining employees will be transferred to other assets or stay in the idle regime. The Company’s HR develops a necessary setup of social support.
The changed production plan for the current year 2020 will be considered at the Board meeting in May. The Company intends to recommence production at suspended assets as the market situation improves.
In 2019, ALROSA produced 2.6 million carats from the Aikhal and Zarya pipes together.
Let us keep our fingers crossed for the future and think about the marketing strategies to get back to normal.