Lukoil changes Arkhangelsk diamonds for cash

Lukoil sells its subsidiary Arkhangelskgeoldobycha to company Open Holding for $1.45 billion. The sum will be paid in cash and is planned completed in the first quarter of 2017, Lukoil informs.  

Arkhangelskgeoldobycha has operated the Grib mine since 2014 and in 2016 produced a total of 4,5 million carat. The mine is located in Arkhangelsk Oblast and the company has the last years been among the biggest tax revenue sources for the regional budget. 

«Lukoil has successfully developed the diamond project from scratch and has taken the Grib mine to target production in line with the planned time schedule and budget,» says company Vice President Aleksandr Matytsyn in a press release.

The deal comes after a U.S. court in November this year turned down suit against Lukoil from the Archangel Diamond Corporation (ADC), newspaper Vedomosti reports. The verdict put an end to a 15 year long conflict over the diamond resources.

The Arkhangelsk diamonds have been the subject to conflict between Arkhangelskgeoldobycha and foreign investors since 1993 when the company established the “Amazny Bereg”, a joint venter with Canadian-registered Archangel Diamond Corporation (ADC) on a 60-40 percent deal. However, the Russian company never handed over the license to the new company as agreed upon, resulting in a court suit from the Canadian side. In 2002, Lukoil bought 100 percent of the Arkhangelskgeoldobycha. Not long after, diamond giant De Beers bougth the Archangel Diamond Corporation, taking the corporate conflict to a higher level.

ADVERTISEMENT