The face of the diamond world has changed dramatically over the last 50 years. Until recently, Diamonds were known to originate predominantly from Africa and India. In the 1930s, Vladimir S. Sobolev noticed the similarities between the rock layers of Siberia to South Africa and Botswana and understood that massive diamond deposits may be likely.
The Soviet Union began to look at diamonds as an important resource possibility. Funny enough, the original intention was to utilize the diamonds for their vital role in industrial and military use in making heavy duty machinery such as for mining and not for the “capitalist value” of gem quality diamonds. Once the Soviet Union realized that the diamonds found were of high quality and could be sold internationally on the lucrative precious stone market, it struck a secret deal with DeBeers to sell their diamonds, making diamonds their most lucrative export! (In true Soviet fashion of doing everything grand scale, so large was the deal that DeBeers suddenly had to find ways to explain where this huge amount of “secret” diamonds was originating from…)
Discovery and Mines
In 1954, the first kimberlite pipe was discovered. Kimberlite is a type of volcanic rock which contains diamonds. These vertical deposits of rock are called kimberlite pipes. Within the next two years, more than 500 kimberlites were found! In the harsh wildernesses of remote, Eastern Siberia, the finds were developed. The sub-zero arctic temperatures which had made diamond mining impossible in earlier times were tackled head on.
The Mirny Mine, discovered by geologist Yuri Khabardin and founded in 1957, became the world’s largest open cast diamond mine with an average yield of 2 million carats annually. By the time its supply was exhausted and the mine closed it was more than 500 meters deep and over a kilometer in diameter.
Another famous mine is the Udachnaya (meaning Lucky) pipe with the largest diamond deposit in Russia and one of the largest in the world. The Mirna and Udachnaya kimberlite fields were discovered within ten days of each other.
Two other large Russian mines are the Northerly Anabar mine, located in the Arctic Circle and only operated during the summer and the Jubilee (Yubileinaya) Mine in the Sakha Republic.
Russia continues it efforts in exploration and geological prospecting and still uncovers untapped prospective diamond deposits.
State Owned Industry
The Russian diamond industry is different to others in that it is almost completely state-owned and is therefore subject to direct state supervision on many levels. Alrosa is Russia’s largest diamond company and is more than 90% state owned. Alrosa is involved in exploration, mining, manufacture and the sale of diamonds. It accounts for 97% of Russia’s rough diamond production and over 25% of the world’s rough diamond supply.
The state ownership has an effect on Russia’s production policies, for example, when other companies were halting production due to the recession and lower demand, Russia continued
production, and began stockpiling, with the goal of keeping the nation’s economy stable and jobs open.
Conflict Free a Top Priority
State control also gives a greater level of credibility to Russia with regards to the issue of conflict diamonds because the close regulations keeps diamond sources and destinations well documented.