Will Russian diamond miner Alrosa’s Chinese clients take up its offer to trade in roubles? Only time will tell
The state-backed diamond mining company denies move was driven by US sanctions, but says long-term benefits include lower transaction costs and faster deliveries
Alrosa, the world’s largest producer of rough diamonds, wants to expand a pilot to trade with its Chinese and Hong Kong customers in roubles instead of US dollars, hoping to lower transaction costs in the long run and quicken deliveries, but the company’s marketing chief admits that it could be an uphill task.
The move comes as the Russian government last month said that it was in favour of bilateral trade with countries in their national currencies in a bid to reduce the role of the US dollar and the impact of US sanctions on its economy.
“It is hard to start, but we hope that with increasing volume, we will reduce the transaction costs,” Evgeny Agureev, director of sales at Alrosa, said in an interview with the South China Morning Post on the sidelines of the Hong Kong Jewellery & Gem Fair.
“My expectation is that, [if we] have two to three long-term contract clients working with us on rouble transactions it would deliver very good results.”
Russian nickel miner Norilsk Nickel has also been exploring settling payments in roubles with foreign customers, although a spokeswoman told the Post no such transaction has been completed so far.
Spokeswomen of both Alrosa and Norilsk insisted that both firms were offering the new payment alternative after customers said they were interested in such an alternative when asked if it was driven by the Kremlin’s desire to reduce the use of the US currency in Russian trade amid the sanctions.