Based on the materials from the company’s official web-site.

Since September 22, 2006 ALROSA starts disclosing information on results of the Market Committee monthly meetings. At the August meeting the Market Committee discussed the current situation in the world diamond market, Company’s compliance with target sales figures as well as client base and decided to introduce certain pricing policy adjustments.

The weakness of rough diamond market that could be seen in the last quarter of 2005 remained in the first half of 2006. The decrease of polished diamond export from the world’s largest polishing centers was accompanied by increasing rough diamonds stocks. At the same time diamond markets have been demonstrating a variety of price trends for several recent months: while prices for large diamonds of more than 1 ct and for small ones (less than 0.1 ct) increased, with medium-sized gems prices remaining weak. ALROSA will build its long-term market outlook on fundamental factors which determine supply and demand balance in the rough diamond market, customer confidence in the key economies, exchange and interest rates trends in the main world diamond trade centers. The Company believes that further influence on the market of extra-economic factors in force in the recent months will be diminishing.

Members of the Market Committee noted that in spite of challenging market conditions ALROSA managed to achieve target sales figures. In the eight months of 2006 ALROSA sold US$ 1,709 million worth of rough diamonds, including US$ 778.4 million sold domestically, 1 per cent over target figures.

Taking into account current conditions in the “Indian goods” segment of the rough diamond market, the Market Committee decided to revise pricing policy for some categories of “Indian goods” effective September 1, 2006.