On the eve of Russian Federation president Vladimir Putin's arrival in Israel this evening, Russian state diamond company Alrosa and Dan Gertler Israel (DGI group) announced that in May they would begin marketing in Israel diamonds from Angola's Katoka mine. Dan Gertler is a scion of the Schnitzer family of diamond merchants.
Alrosa and Israel's largest diamond exporter Lev Leviev jointly own the Katoka diamond mine. The Katoka mine is expected to export $250 million worth of diamonds a year to Israel. Angola's total diamond exports are estimated at $1.5 billion a year.
Alrosa CEO Alexander Nichiporuk will be a member of Putin's entourage in Israel. The heads of Gazprom will also be members. Alrosa recently confirmed that it had bought a large stake in Sunland Mining (Angola), which the DGI group founded and owns.
Alrosa and Gertler will also cooperate in developing Angola's diamond mines, under an Angolan government liberalization program and allocation of diamond marketing franchises among several companies. Gertler is considered Leviev's strongest competitor in Africa, alongside Benjamin (Beny) Steinmetz.
Sunland Mining is one of the three companies chosen to market Angolan diamonds since the government abolished the state monopoly last month. The other franchisees are Sodiam International and Yakson. So far as is known neither company has Israeli partners.
Alrosa's decision to market Katoka diamonds in Israel is a new source of rough diamond for Israel, and the first of its kind. Nichiporuk discussed Alrosa direcly marketing rough diamonds to Israel with Minister of Industry Trade and Labor Ehud Olmert during a visit to Israel two months ago.
By marketing Angolan diamonds in Israel, DGI is greatly strengthening its position as a leading source of rough diamonds. DGI previously had a monopoly on the export of diamonds from the Democratic Republic of the Congo (Kinshasa). Although the monopoly was cancelled two years ago, DGI is still a major player in the Congolese diamond market.
Diamond industry sources say that the tightening ties between DGI and Alrosa are likely to spread to the Congo.
Gertler and DGI declined to comment on the report.
Published by Globes [online], Israel business news - www.globes.co.il - on April 27, 2005