Russia's Alrosa buys Degdekan gold deposit from Polyus
MOSCOW - Russian diamond producer Alrosa has bought a gold deposit in Russia's Far East from miner Polyus, the two companies, both of which are under Western sanctions, said on Monday.
For the world's biggest diamond producer, the move marks a deeper push into gold which it said would fit with the rest of its business and strengthen it financially while not significantly changing its strategy.
"The development of the gold deposit will provide an additional synergistic effect for Alrosa’s business and will help increase its financial stability in the long term," Alrosa boss Pavel Marinychev said in a statement.
Alrosa plans to invest 24-billion roubles ($276-million) initially to develop Degdekan, it said, and estimated annual gold production at full capacity from 2030 of 3.3 tons.
Polyus said it was selling the Degdekan deposit in order to optimise its exploration portfolio as it prepares to begin development of the vast Sukhoi Log deposit in Siberia.
The two companies did not disclose the value of the deal.
Polyus had held the licence to develop Degdekan, in the Magadan region of Russia's Far East, since 2005. Alrosa, which has mined gold as a secondary activity for years, said it aims to develop the site until 2046.
"Alrosa's strategy does not change in any way and continues to concentrate on the diamond business. At the same time, we always consider the possibility of participating in projects where we can use our competencies in mining," a company representative told Reuters.
The attractiveness of the Degdekan deposit was partly based on its proximity to transport and energy infrastructure, the representative said.
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