Russia digs for diamonds to ensure supremacy in global market

Trucks carry the ore out of Botuobinsky diamond mining pit of Nakyn diamond ore field from the town of Mirny. (AFP)
Updated 08 July 2019
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Russia digs for diamonds to ensure supremacy in global market

  • Mirny was founded in the mid-1950s after the discovery of the first diamonds

MIRNY: Diamonds are forever, and so is the permanently frozen ground of Yakutia in northeastern Siberia, home to huge diamond deposits that ensure Russia’s supremacy in world production of the luxury stone. In the city of Mirny, the sun shines almost continuously during the region’s white night season in early July, with temperatures exceeding 30 degrees Celsius. But the summer does not last long. Yakutia is known for having the coldest winters on the planet, which drag on for nine dark months.
This region — rich in oil, gas and precious metals — is also home to 11 out of 12 mines belonging to Russia’s Alrosa group, the world’s largest producer of rough carats.
The majority state- and local government-owned company employs most of Mirny’s 35,000 inhabitants and contributes around 40 percent of the wider region’s budget in taxes.
Alrosa, which has been criticized by some locals for alleged environmental damage including polluting water supplies, has a reputation for secrecy but is now making efforts to demonstrate some of its work.

Inside the mines
In Mirny, a gaping hole of massive depths — the abandoned mine “Mir” — stretches out into the city. It is more than a kilometer in diameter and 525 meters deep, or nearly two Eiffel towers placed end to end.
Oleg Popov, the director of Mirny’s diamond sorting center, shows off a billiard table covered in shiny stones.
“There are 14,000 carats worth around $9 million on this table,” he said.
“Each stone must be sorted by size,” said Irina Senyukova, leaning on stones in the nearby sorting room.
To reach the next diamond deposits themselves, visitors board a 20-seater Antonov plane and head north, across the taiga, to Nakyn, where Alrosa operates two open-pit mines and is planning for a third out in the wilderness.
The most productive mine, Botuobinskaya, is currently only 130 meters deep, but the company plans to dig down 580 meters.
The operating mines will be exploitable until 2041, the company hopes.

FASTFACT

● This region — rich in oil, gas and precious metals — is home to 11 out of 12 mines belonging to Russia’s Alrosa group.

● The majority state- and local government-owned company employs most of Mirny’s 35,000 inhabitants.

● It contributes around 40 percent of the wider region’s budget in taxes.

● The operating mines will be exploitable until 2041.

Inside the mines, the temperature drops to -55 degrees Celsius in winter, which requires an increased use of explosives to extract diamonds.
“The climate has an impact on our machines, but they are adapted to the extreme conditions,” said Mikhail Dyachenko, deputy chief of the mine, standing on the edge of the precipice and wearing a safety helmet.
“Man will adapt to anything, most of the miners are natives of the region. They know this climate well,” he added.
Trucks go down the mine slowly, spiraling down thin dirt roads dug into the rock. The descent can last up to an hour.
In each ton of ground, there are around 6.2 carats of diamonds. After sorting, the rough diamonds are transported on secret flights to be sold around the world.
Some are flown to polishing centers in Moscow and Smolensk, a city in Western Russia.

Security
The process takes place under heavy security, which was tightened further since a small gang of employees stole $3 million worth of diamonds last month. The diamonds were later recovered.
Mirny was founded in the mid-1950s after the discovery of the first diamonds. Its first mine functioned until 2001, and it was closed down in 2017 after a flood killed eight people.
Last year, several dams built by the company broke and villages around Yakutia’s Vilyuy River said they could no longer use it as a water source.
Russia’s environment watchdog estimated the damage to the Vilyuy basin at 22.1 billion rubles (over $330 million) but said Alrosa would not be held accountable as the accident was caused by a natural disaster.
Separately, the company said in April it would provide 833 million rubles over five years for a program to improve the quality of drinking water in the river area.
Miners are exclusively men, predominantly from the region but also from the rest of Russia. Planes or helicopters carry the miners to the sites, where they work 11 hours a day for two weeks, then have a two-week break.
“Local, indigenous communities lived here, and still live nearby — they are reindeer herders, but some of them go to the city to look for work,” said Dmitry Averyanov, who drives trucks that survey the mines.
As for the future, Alrosa is looking for ways to reopen Mirny’s mine. Works are not due to start before 2024 and their cost is estimated at 73 million rubles.


Funds managing $2 trillion urge cement makers to act on climate impact

A general view of Gulf Cement Company in Ghalilah, Ras al Khaimah, United Arab Emirates July 16, 2019. (REUTERS)
Updated 23 July 2019
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Funds managing $2 trillion urge cement makers to act on climate impact

  • The cement industry produces 7 percent of the world’s carbon dioxide emissions, according to the International Energy Agency, meaning that if it were a country, it would be the third largest emitter, behind the US and China

LONDON: European funds managing $2 trillion in assets called on cement companies to slash their greenhouse gas emissions on Monday, warning that a failure to do so could put their business models at risk.
Some asset managers are ramping up engagement with heavy polluters to demand a faster transition to a cleaner economy.
“The cement sector needs to dramatically reduce the contribution it makes to climate change,” said Stephanie Pfeifer, CEO of the Institutional Investors Group on Climate Change, which has more than 170 members, mainly European pension funds and asset managers. “This is ultimately a business-critical issue for the sector,” Pfeifer said in a statement.
The group said investors had written to cement or construction materials companies including Ireland’s CRH, Franco-Swiss group LafargeHolcim and France’s St. Gobain to demand they achieve net zero carbon emissions by 2050.
They also noted that Germany’s HeidelbergCement had already adopted the target. The funds urged all cement companies to align themselves with the 2015 Paris agreement to combat global warming, engage with policymakers to ensure an orderly transition to a low carbon economy, and increase their reporting of climate risk.
“Construction materials companies may ultimately risk divestment and lack of access to capital as an increasing number of investors seek to exclude highly carbon-intensive sectors from their portfolios,” said Vincent Kaufmann, CEO of the Ethos Foundation.

FASTFACT

The cement industry produces 7 percent of the world’s carbon dioxide emissions, according to the International Energy Agency.

Signatories collectively manage assets worth $2 trillion and include Aberdeen Standard Investments, BNP Paribas Asset Management, Sarasin & Partners and Hermes EOS.
Although funds are increasingly engaging with companies from airlines to carmakers on emissions, few are calling for the systemic transformation of the global economic system that scientists increasingly argue is needed to prevent runaway climate breakdown.
The cement industry produces 7 percent of the world’s carbon dioxide emissions, according to the International Energy Agency, meaning that if it were a country, it would be the third largest emitter, behind the US and China.
With climate campaigners traditionally focused on fossil fuel companies, the European cement sector has received comparatively little scrutiny until recently.
On Tuesday, police arrested six climate activists from civil disobedience group Extinction Rebellion at a protest aimed at disrupting a site in east London belonging to London Concrete, a unit of LafargeHolcim.
In June last year, a report from think-tank Chatham House concluded that although there was no “silver bullet” to reduce emissions from cement, it should be possible to deploy a range of policies and technologies to achieve deep decarbonization.