Russia is to establish a diamond cutting cluster spanning the Republic of Sakha (Yakutia) and the Smolensk Region, under an initiative to develop the country’s domestic diamond-cutting industry.
President Vladimir Putin signed an executive order on August 6 directing the creation of the cluster. It is scheduled to begin operating under the decree from March 1, 2027.
Kristall to Form the Foundation
The cluster will bring together eligible legal entities and individual entrepreneurs involved in diamond cutting and polishing. The Smolensk-based Kristall cutting plant, owned by state-controlled diamond miner Alrosa, will form the foundation of the initiative alongside facilities in Yakutia, Russia’s main diamond-producing region.
Alrosa CEO Pavel Marinychev previously told Putin that participants would have access to rough diamonds “along with preferential pricing”, provided that “all of the rough stones allocated to them are cut and polished within the cluster”.
The government will establish criteria for companies seeking inclusion in the cluster’s register, as well as procedures governing the supply of rough and partially polished diamonds to participants.
Supply and Regulatory Framework
Almazyuvelirexport Foreign Economic Association has been appointed as the cluster operator. It will maintain the register of participants, assess whether companies meet the eligibility criteria and coordinate interaction between cluster members and Russian natural diamond mining companies.
Under the executive order, mining companies that meet the requirements of Russia’s Federal Law on Precious Metals and Precious Stones will be required to offer rough and partially polished natural diamonds to registered cluster participants before placing them into circulation.
The Ministry of Finance has been instructed to establish the detailed eligibility criteria and procedures for admission and removal from the register, as well as rules governing the supply of diamonds and interaction between the participants, operator and mining companies.
Push Towards Domestic Processing
The initiative is intended to support domestic diamond cutting and polishing by linking registered participants with Russian rough and partially polished diamond suppliers.
The move comes as Russia’s diamond sector continues to operate under international sanctions and amid weaker conditions across the global natural diamond market. Marinychev told Putin that “the global diamond industry is currently experiencing the deepest sectoral crisis in its entire history”.
Russia is also introducing an 8% export duty on certain rough diamonds from September 1. The measure is intended to make domestic processing more attractive relative to exporting rough stones.
For jewellers and manufacturers, the new framework establishes a domestic channel through which eligible participants can access Russian rough and partially polished diamonds. The extent of its effect on the wider diamond trade will depend on how the cluster operates once it becomes active.
The cluster is due to become operational on March 1, 2027.
