Moscow, 16 April 2021 – ALROSA, a global leader in diamond production, reports its Q1 2021 diamond production of 7.5 m carats and sales of 15.5 m carats.

Q1 2021 trading update:

• Ore and gravels output grew 54% q-o-q to 8.7 mt mainly due to planned growth of mining volumes at Severalmaz and at the Jubilee pipe due to better mining and geological environment.

• Ore and gravels processing increased 17% q-o-q (down 3% y-o-y) to 5.8 mt on higher utilisation rates (launch of the processing plant No. 14 after planned maintenance and the processing plant at Severalmaz starting 1 March).

• Diamond production grew to 7.5 m cts (up 6% q-o-q and down 6% y-o-y), driven by increased ore and gravels processing.

• Diamond grade decreased 9% q-o-q (down 3% y-o-y) to 1.31 cpt primarily due to a larger share of ore processed from the Jubilee pipe and V.Munskoye deposit (lower grade deposits).

• Diamond sales totalled 15.5 m cts (down 9% q-o-q and up 65% y-o-y), including 9.7 m cts of gem-quality and 5.8 m cts of industrial-quality diamonds.

• Diamond inventories as at the end of Q1 decreased to 12.8 m cts (Q4 2020: 20.7 m cts). Ore and gravels inventories as at the end of Q1 amounted to 29.5 mt (up 11% q-o-q and down 2% y-o-y).

• Average realised prices for gem-quality diamonds grew to $113/ct, up 25% q-o-q (down 8% y-o-y) on the back of a higher price index and a better sales mix.

• Average price index gained 7% q-o-q, rising 9% YTD and coming closer to the pre-COVID-19 levels of early 2020.

• Proceeds from rough and polished diamond sales in Q1 came in at $1,159 m (down 5% q-o-q and up 28% y-o-y), including $1,126 m in revenue from rough diamond sales and $33 m in revenue from polished diamond sales.

• Market update: diamond jewellery demand remains sustainably high at all the key markets. Supply of rough diamonds is constraint by production capacities of the mining companies, and global production in the mid-term is expected to remain ~20% below its pre-COVID levels. Mid-stream stocks of rough and polished remain balanced.

* For gem-quality diamonds. For quarterly indicators Q1 2017 = 1.00.

Diamond market overview

• Demand from end consumers for diamond jewellery demonstrated robust growth across key markets in Q1 amid seasonally strong demand in the US and China (Valentine’s Day and Chinese New Year) and improved consumer sentiment. The growth was also driven by recovering demand for bridal segment, which migrated from 2020 to 2021 as a result of the COVID-19 pandemic.

• Midstream segment: India’s cutting and polishing industry increased diamond production in early 2021 in response to stronger demand from the retail sector following robust holiday sales of jewellery on the largest consumption markets.  Polished diamond prices recovered and exceeded their pre-COVID-19 levels by early 2021, remaining relatively stable throughout Q1.

• Demand for rough diamonds stayed at consistently strong levels, including as a result of a sensible sales policy of major diamond producers seeking to meet real demand and maintain the market balance in the rough diamond sector. Demand for rough diamonds remains sustainably strong as cutters and polishers took steps to maintain adequate stocks during the downturn of 2020 and demand from end consumers of diamond jewellery continued growing at a robust rate, especially in the US and China.

Hereinafter, data on Q1 2021 production, sales, prices, and inventories is preliminary and may be updated. Data on the diamond market is the Company’s estimate.