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Russian state-controlled diamond company Alrosa will begin selling rough diamonds to Israel on a set basis through the diamond exchange. The first round will be worth $4 million and will take place toward the end of the month.

Alrosa is considered to be the second largest diamond mining company in the world, producing $3 billion worth annually. It sells most of its diamonds to De Beers through a multi-year contract expected to expire this year. Alrosa also sells diamonds to the Russian market, and buyers from all over the world, including Israel, come to Russia for its rough diamonds.

Local diamond industry figures had expected Alrosa to sell rough diamonds here in the order of $100-$200 million annually. Despite the disappointment, Avi Paz, president of the Israel Diamond Exchange, said he views this development positively.

"It's a first step, and I hope it will continue to expand. Alrosa representatives spoke with us about larger sums." Paz observed that "the prices of Alrosa's diamonds are apparently attractive relative to the global rough diamond market, otherwise people wouldn't go to Russia on a weekly basis to buy."

Paz added, "We made a lot of efforts in recent years to reach this stage. There's no doubt Alrosa's participation in the diamond exchange strengthens the industry." He pointed to other recent successes such as Canadian firm Aber Diamond Corporation opening and office and De Beer's decision to expand its operations here.