Alrosa Slides into Loss as Natural Diamond Demand Stays Weak

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Russian diamond mining giant Alrosa has slipped sharply into the red in the first half of 2026, highlighting the continuing pressure on one of the world’s largest diamond producers as weak demand, sanctions and geopolitical uncertainty weigh heavily on the international diamond trade. The company reported a net loss of RUB 10.67 billion ($129.7 million) for the six months ended June 30, a dramatic reversal from the RUB 39.03 billion ($474.52 million) profit recorded during the corresponding period of 2025.

Revenue also suffered a substantial setback, falling 36% year on year to RUB 74.16 billion ($901.6 million). While Alrosa did not attribute the decline to a single factor, this Gems News report notes that the miner has identified a combination of geopolitical and macroeconomic uncertainty, international sanctions, elevated gold prices, changing consumer preferences in jewelry and subdued demand for both rough and polished diamonds as forces shaping the Russian diamond sector.

Diamond Downturn Takes Its Toll

The latest financial figures underline the severity of the challenges facing Alrosa at a time when the wider natural-diamond industry is still attempting to restore stability following a prolonged period of inventory adjustments and softer consumer demand.

Alrosa’s swing from a sizeable profit to a substantial loss is particularly striking. The difference between its first-half 2025 profit and first-half 2026 result represents a deterioration approaching RUB 50 billion, while the steep revenue contraction indicates that the company continues to operate in a difficult sales environment.

Demand for rough diamonds has remained under pressure as manufacturers and traders carefully manage inventories and purchasing levels. At the same time, polished-diamond demand has faced its own challenges, adding further strain across the supply chain.

Sanctions Continue to Reshape Russian Diamond Trade

International restrictions remain another major complication for Alrosa. The United States and other Western countries have imposed sanctions and restrictions on Russian diamonds following Russia’s invasion of Ukraine in February 2022.

Russian diamonds have continued to reach parts of the international market despite those measures, although the routes through which stones move and the markets in which they are ultimately sold have changed considerably.

Alrosa, meanwhile, no longer provides a detailed geographical breakdown showing where its diamonds are being sold. This makes it more difficult for outside observers to determine how the miner’s customer base and sales destinations have evolved under the sanctions regime.

The continuing restrictions are significant not only for Alrosa but also for the broader global diamond industry, given Russia’s historically important position in worldwide rough-diamond production.

New 8% Export Tax Adds Another Challenge

Alrosa is also preparing for a new domestic measure that could place additional pressure on profitability.

The Russian government is introducing an 8% export tax on unprocessed rough diamonds weighing more than 0.45 carats, with the measure also covering special-sized rough diamonds weighing more than 10.8 carats.

The tax is scheduled to take effect on September 1, 2026.

Alrosa estimates that the new export duty will reduce its profit by approximately RUB 3.12 billion ($37.9 million). The additional cost arrives at a particularly sensitive moment, with the company already confronting weaker revenue and difficult conditions in its major markets.

The tax could therefore become another important factor influencing Alrosa’s sales strategy, margins and approach to international distribution during the remainder of the year.

Alrosa Still Betting on a Natural Diamond Recovery

Despite its first-half loss and the difficult operating environment, Alrosa remains optimistic about the longer-term prospects for natural diamonds.

The company expects demand for diamond jewelry to recover and predicts that consumption could return to 2022 levels by 2027. It has also forecast that diamond prices will increase by approximately 2% annually.

Such expectations suggest that Alrosa sees the present weakness as part of a prolonged market cycle rather than a permanent deterioration in demand.

However, the speed and strength of any recovery will depend on several factors, including consumer confidence, jewelry spending, inventory levels throughout the midstream, geopolitical developments and the ability of the international diamond trade to navigate continuing restrictions on Russian-origin stones.

A Difficult Road Ahead Despite Recovery Hopes

Alrosa’s first-half performance provides a stark indication of how dramatically conditions have changed for the Russian diamond heavyweight. Moving from a RUB 39.03 billion profit to a RUB 10.67 billion loss in just one year demonstrates the combined financial impact of weaker demand, geopolitical disruption and a rapidly evolving global trading environment.

The coming months could prove particularly important. Alrosa must contend with the new export tax while waiting for the recovery in diamond jewelry demand that it believes will strengthen the market by next year. If demand improves and diamond prices begin their anticipated gradual rise, the miner could regain some lost ground. If weakness persists, however, pressure on revenue and profitability may remain a defining feature of its performance.

For the wider diamond industry, Alrosa’s results are another reminder that the global market has yet to emerge fully from its prolonged slowdown. The Russian miner may be forecasting brighter conditions ahead, but its latest numbers show that the path toward a meaningful and sustained recovery remains challenging, uncertain and closely tied to developments far beyond the diamond mines themselves.

For more on Alrosa, visit:

https://alrosa.ru/en