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Diamond Mining in Siberia

by Murray Lundberg

Dateline: October 19, 1999 (links updated October 26, 2011)

    From the frozen ground of Siberia, specifically from Yakutia (the Republic of Sakha), come what many experts consider to be the world's clearest diamonds.

    Encompassing an area of 3 million square kilometers, half of it above the Arctic Circle, Yakutia is more than 3 times the size of Alaska. It is sparsely populated, with most residents living in the capital of Yakutsk, or the mining cities of Mirny (diamonds), Aldan (gold) and Nerungry (coal).

    There is currently a strong international effort to increase tourism in Yakutia, both non-consumptive ecotourism, and other forms such as hunting for the region's large moose. The fascinating history of the region attracts many visitors.

    Yakutia is extremely rich in natural resources, with huge reserves of coal, antimony, nickel, manganese, lead, cobalt, tungsten, molybdenum, bauxite, sulfur and asbestos, as well as having vast forests, and oil and natural gas reserves that some feel rival those of Saudi Arabia. The diamond fields of Yakutia, however, are the region's most important resource at the present time, and are what make Yakutia a relatively bright light in the troubled Russian economy. Yakutia produces 100% of Russia's antimony, 99% of its diamonds (Russia's main source of foreign currency income), 24% of the gold and 33% of the silver. The quality of gems such as chrome diopsides are also starting to gain them international prominence, and a depost of charoite is the only one known in the world.

    Geologist Mikhail M. Odintsov is generally credited with discovering the first diamonds in Yakutia. That, and other accomplishments in the field, led to his appointment as head of the The Institute of the Earth's Crust of the Siberian Branch of the Russian Academy of Sciences from 1964 until 1976.

The Russian government and private companies are very active in the diamond fields. The Ministry of Natural Resources is conducting extensive geophysical surveying in the Anabar Shield region (73° 08' N., 113° 36' E.). New exploration and data analysis methods such as seismic data processing are proving to be very effective in located new diamond properties.

    Following the signing of the Agreement on Economic Relations between the governments of the Russian Federation and the Republic of Sakha on March 31, 1992, a joint stock company called Almaz - formerly Almazy Rossii-Sakha (Diamonds of Russia and Sakha) - was formed to coordinate mining efforts and negotiate sales. Owned by various federal, state and local authorities, as well as by employees through a co-op, the company controls 95% of the diamond industry in the republic.

    The 1992 Agreement also gave the republic the right to keep part of its export revenues. While this is of course good for Yakutia, similar demands from other regions are causing problems with the federal treasury. All uncut diamonds used to be purchased and exported by the Russian Federation, but a percentage (currently 20%) is now handled directly by the republic, through Alrosa. Efforts to dramatically increase the amount of local processing of the diamonds are underway as well.

    Relations between Yakutia and the world's diamond buyers (particularly DeBeers) are not always cordial. Strained relations were particularly apparent after world markets were affected by sales from huge Russian stockpiles of diamonds. The new structure of Russian society has also led to the increased visibility of a a "diamond elite", which many people, both at home and abroad, are not pleased about.

    The situation in Yakutia's diamond industry will be changing rapidly over the next few years, as they respond to the huge new diamond finds in the Canadian Arctic. It should be a very interesting process to watch, and we hope that it works out to everyone's ultimate advantage.

Diamonds in the Canadian Arctic

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