Russia set to sign diamond deal

After more than a year of on-off negotiations, De Beers finally hopes to sign its long-awaited diamond marketing deal with Russia on April 15.

The announcement would coincide with an upbeat statement from Julian Ogilvie Thompson, chairman of the international mining cartel, when it releases its 1996 annual report on the same day.

Speculation that an agreement is finally in the offing was heightened by statements in Moscow last week from Almazy Rossii-Sakha, Russia's diamond marketing company.

"[First Deputy Prime Minister Anatoly] Chubais has said the decision will be taken on 15 April," ARS spokesman Valentin Logunov said. "I don't think there will be any cardinal, principle changes to the trade deal struck last year."

De Beers has been waiting since last February, when it struck the new outline deal to keep Russia in the cartel. This year, it refused to buy any more Siberian gems, in frustration at continued Russian leaks while it remained buyer of last resort.

The presidential election in Russia last year was a principal cause of delay, with frequent reshuffles of the government - the latest last month - also disrupting the negotiations.

Squabbles within the Russian industry, between the Kremlin, parliament, ARS, the Siberian diamond producing republic of Sakha and the country's own nascent cutting industry further complicated the situation.

This weekend, it was unclear whether all the parties have reached agreement over their share of the deal, which is worth $1.3bn (pounds 800m) a year in precious hard currency to Russia.

Gary Ralfe, a director of De Beers' London-based Central Selling Organisation, headed a delegation to Moscow last week for talks with officials. "Everyone there wants to sign. We want to sign. We have an agreement with ARS, which we can't reveal until that is done," a De Beers spokesman said.

The CSO controls around 75 per cent of the world's $4.5bn annual trade in uncut diamonds, with Russia usually accounting for 20 per cent of sales.