Following more than a year of difficult negotiations, De Beers Consolidated Mines and Russia have signed a contract for sales of Russia’s rough gem diamonds.
The deal renews a 35-year relationship between Russia and De Beers, which had been shaken by Russia’s diamond sales outside the quota allowed by De Beers’ Central Selling Organization (CSO).
In 1994, Russia sold up to US1$ billion worth of rough diamonds outside its sales to the CSO.
Despite further direct sales to the market by Russia in 1995, the CSO reported record annual sales of US$4.5 billion. Responding to strong demand for larger, better-quality diamonds in the second half of the year, the CSO increased the price of gems weighing 2 carats or more by an average of 5%.
In its annual report, De Beers says negotiations with Russia took a turn for the better in August 1995, when Russian Prime Minister Viktor Chernomyrdin became involved in the process.
A memorandum of agreement establishing De Beers as the sole and exclusive buyer of Russian rough diamond exports was signed Feb. 23.
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