Russian Silver and Gold producer, #Polymetal, has called time on its Arkhangelsk region diamond joint venture with Proex Service citing the advent of the the US startup Diamond Foundry, and the development of artificial diamond production capacity, as part of its reasoning.

Speaking about Polymetal’s decision to back away from the diamond sector, Polymetal CEO, Vitaly Nesis, referred to the high profile Diamond Foundry, which has attracted attention from a range of media luminaries, including Leonardo Di Caprio, Twitter founder Evan Williams, Zynga founder Mark Pincus and former eBay president Jeff Skoll in raising an estimated USD $100 mln in seed capital in 2015.  Di Caprio has also been a prominent critic of diamonds sourced in Africa and the role they play in funding a range of civil wars and terrorist groups in West Africa.

“In view of the very negative PR campaign in the sector coming even from famous people like Leonardo DiCaprio [who invested in Diamond Foundry, a start up producing artificial diamonds], it is of no interest to us any more,”  Nesis stated. “We have reviewed the prospects, diamond business perception by investors in global financial markets and have decided that we do not need this”. Nesis added that the details on how they would exit their joint venture with Russian diamond exploration minnow, Proex Service, were still to be precisely mapped out.  Proex Service located 7 kimberlite pipes near Arkhangelsk in the Kozolsky licence area over 2016 and 2017, before announcing the discoveries late last year, and bringing in Polymetal to look at development.

Polymetal’s Nesis now says the company more interested in developing Vikshi platinum group metals deposit in Russia’s Karelia with investments in the project estimated at USD 500 mln. He is expecting a feasibility study scheduled for next year to upgrade reserves in the project from the current estimate of 6.6 mln ounces, or 187 tons, as much as tenfold

Polymetal is also looking at bringing in a South African partner for this project according to Nesis. “This is a project with a synergy potential for a joint venture, since we are not experts in platinum group production. It would probably make sense to work with competent South African companies that face problems with their resource base at the moment. They are looking for assets to use their [know how]”.

He added that with deposits being closed in South Africa a new generation of South African companies are now facing problems accessing supply, making Russia a promising opportunity.  Polymetal’s CEO also noted that demand for platinum, used in emission control catalysts for cars, is expected to strengthen, underpinned by Chinese demand reflecting a shirt towards stricter environmental standards for internal-combustion engines.