ALROSA Approved Production Development Plan Up to 2021
OREANDA-NEWS. June 25, 2012. Meeting of ALROSA Supervisory Board was held in Moscow chaired by Ilya Yuzhanov, reported the press-centre of ALROSA.
The Supervisory Board considered and approved in principle ALROSA’s production development plan up to 2021.
Today ALROSA is the world’s largest rough diamond producer.
The key objectives up to 2021 are as follows:
- ensure the Company’s effective development due to concentration on its core business–diamond mining;
- retain leadership on the world market;
- anticipate replenishment of the mineral raw material base;
- raise the Company’s market value;
- implement investment projects to put into operation new facilities.
The long-term plan stipulates for the growth of production volume up to 2021 from current 34 million carats up to the average of 38-40 million carats.
The production volume growth will be ensured by ALROSA’s underground mines under construction and the attained designed capacity of OJSC Severalmaz.
The share of rough diamonds from open-pit mines will be systematically reduced from 72.8% in 2011 down to 40% in 2021, and the volume of rough diamonds from underground mines will grow from 27.2 up to over 60%, respectively. However, there are objective risks of production reduction, which are conditioned by geological features of the deposits and some possible changes in mining conditions at the mines under construction.
ALROSA is examining the possibility of purchasing diamond-mining assets, first of all, on the territory of the Russian Federation.
Within the framework of implementation of the non-core assets strategy, ALROSA has set the goal to involve strategic investors in the Timir iron ore project and the gas production project (Urengoy Gas Company and Geotransgaz).
The planned increment in rough diamond reserves over this period will exceed 451 million carats. The total volume of rough diamond reserves forecasted for January 1, 2022 is over 1,190 million carats.
The most significant risks while attaining the planned parameters of ALROSA’s development are as follows:
- marketing risks – actual growth rates of rough diamond cost fall behind those forecasted;
- specific risks – volumes and quality of produced rough diamonds are not confirmed;
- technological risks, namely: mining and geological conditions are complicated, underground mines do not achieve their designed capacity, deadlines for development of the deposits are not met. Influence of technological risk factors on ALROSA’s financial and economic indices was assessed based on the possible partial deficiency in the marketable output from Mir, Udachny and Solur-Vostochnaya mines.
The possible loss volume for the period of 2012-2021 in case of unfavorable scenario is assessed at 8.7 million carats by ALROSA Group.
The Supervisory Board will return to the Company’s long-term development plan after the additional expert appraisal of the development prospects of the world diamond market.
The Supervisory Board considered the report on implementation of the Program of Innovation Development and Technological Modernization of OJSC ALROSA for 2011.
The aggregate volume of financing of the program from the Company’s own funds and the subsidies exceeded RUB 1,106 million. Twenty-seven scientific and technical projects were developed and implemented.
The Supervisory Board approved ALROSA’s contribution in 2012 to form the Special-Purpose Capital Fund of Skolkovo Institute of Science and Technology of RUB 147.6 million, and instructed the Executive Committee of the Company to prepare and submit proposals on cooperation with the Fund.
The Supervisory Board changed the structure of ALROSA’s Executive Committee. The decision was made to terminate the powers of the Executive Committee member Mr. Dmitry Mostovov, former Director of the Mirny Mining and Processing Division. Ilya Ryashchin, ALROSA’s First Vice President, is elected the Executive Committee member.
The Supervisory Board also voted to approve the Company’s participation in the organizations as follows: - in the energy saving and energy efficiency sector – self-regulatory organization non-commercial partnership EnergoAuditEkspertiza (Moscow);
- in the mining technologies sector – non-commercial partnership RF Technological Platform Hard Mineral Resources (Moscow);
- in the innovation management sector – non-commercial partnership Innovation and R&D Directors Club (Moscow).
Since June 9, 2012 – First Vice President of OJSC ALROSA in charge of finance and economy Mr. Ilya Ryashchin was born on May 23, 1973 in Gorky.
In 1996 he graduated from the Lobachevsky State University of Nizhny Novgorod with a Diploma in Finance and Credit and was qualified as Economist.
1990 - 1994 – Economist with the Statistics Section, Gorky Regional Statistics Directorate
1994 - 1998 – Chief State Tax Inspector, Deputy Head of Section, State Tax Inspection in Sovetsky district, Nizhny Novgorod
1998 - 2001 – Deputy Head of Tax Service, First Deputy Head of Financial Service, Gorky Railways Directorate
Since 2001 – Deputy Head of Finance Department, Ministry of Railways of Russia
2003 - 2012 – Deputy, First Deputy, Finance Management Department, Corporate Finance Department, Head of Planning and Budgeting Department, OJSC Russian Railways