In pursuit of ALROSA diversification strategy approved by its Supervisory Board the company intends to complete the bidding process to attract financing to build an oil refinery and related infrastructure at the Irelyakh oil field in the Republic of Sakha (Yakutia) by the end of November.

CJSC Irelyakhneft (with 100% ALROSA’s capital) as the project operator holds the license for production of hydrocarbons at the Irelyakh oil field located near the main production sites of ALROSA.

Under the Project it is planned to achieve the designed oil production level (250 thousand tons per annum) and to build and commission an oil refinery of adequate capacity within 3 years. The oil refinery is to produce a wide range of oil products required to support ALROSA’s production activities.

The total capital investment is estimated at 6 billion rubles. Funds are to be attracted as project financing, with a limited recourse to ALROSA. The loan is to be repaid from funds generated by the Project. The expected loan period is 8 years, with a 3-year grace period.

As of today, 8 large international banks have submitted their bids.

When implemented, the Project will relieve ALROSA’s dependence on oil supplies, reduce oil transportation and handling expenses, and improve overall performance of the company.