ALROSA president Sergey Vybornov reported that the company and the Ministry of Trade and Economic Development have thus kept their promise of cooperation given to Armenia`s prime minister this past August. "We started supplying rough diamonds to Armenia`s enterprises for further processing," he said.

ALROSA vice president Sergey Ulin said that rough diamonds were supplied to Armenia under a purchase and sale contract, under which enterprises purchase the rough diamonds on easy terms set by the ALROSA.

"The rough diamonds are full property of diamond producers, and they are free to do with their products what they want," he said.

Ulin also pointed out that tremendous work was undertaken to resolve the historical problems at customs.

"With our Armenian colleagues we have overcome the difficulties, and ALROSA rough diamonds is in Armenia now and ready for processing," he said.

The chairman of the International Association of Armenian Jewellers, owner of the DCA diamond-cutting enterprise, member of Parliament, Gagik Abramyan, pointed out that four Armenian enterprises would process these rough diamonds in Armenia: Daymotek Company, Arevakn, SCA, and Ukos. The four companies passed inspection by ALROSA in October. ALROSA will inspect more companies in July 2008.

On August 6, in Yerevan, the government and ALROSA signed an agreement on cooperation between jewellery and diamond-cutting industries. The agreement envisaged the supply of rough diamonds to Armenia for processing and re-export. Under the agreement, Armenia`s diamond-cutting enterprises are to process rough diamonds 0.30 to 1.5 carats, which is not as viable to process in Russia. Armenia has many professional diamond cutters capable of processing up to 1 million carats yearly.

Ulin reported that the company plans to hold another meeting to discuss the results of the first six months of its cooperation with Armenia and determine the parameters of cooperation with possible corrections toward larger supplies in 2008 and 2009.

Armenia`s minister of trade and economic development, Nerses Yeritsyan, expressed hope that ALROSA would put its plans into practice within the next few years.

"We have much to do to specify the policy and prospects for development to amplify the opportunities for business expansion in Armenia by such a large company as ALROSA, and not only in diamond processing," the minister said.

Abramyan said that experts at ALROSA would be visiting the country again next July to conduct inspections at the country`s diamond cutting enterprises.

"The issue of increasing the number of Armenian diamond cutting companies meeting the ALROSA set terms will be considered," he said.

"At a meeting with President Robert Kocharyan we talked about the purchase of rough diamonds as well as about the supply of diamonds for further processing and re-export," he said.

Vibornov further stated that ALROSA is conducting activities in the Azatek gold mine of Armenia. According to Vibornov, ALROSA plans to purchase another mine in Armenia soon. According to preliminary data, the reserves of Azatek mine in Vayots Dzor Region total 13 million tons.