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Alrosa begins restoration works at flooded Mir diamond mine

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Alrosa begins restoration works at flooded Mir diamond mine

Russian diamond miner PJSC Alrosa has begun restoration works in the flooded Mir mine at its Mirny Division in a process that will take a number of years, company CEO Sergey Ivanov told Interfax on Oct.5.

"The company is starting a project to restore the mine. It's too early to talk about time frames, but it's clear that the project will take several years due to the challenging geological environment and water-bearing strata. We have a huge job ahead of us," he said.

Ivanov went on to say that the loss of the mine will have a negative impact on 2018 production levels but the company has substantial ore stockpiles and other deposits it can use to soften the blow.

Previously, Alrosa insisted it would meet its production guidance of 39.2 million carats for 2017 by ramping up output at other assets.

Water from the pit above flooded into the Mir pipe Aug. 4, leaving eight miners missing and rendering the facility nonoperational. Rescue operations continued for a number of weeks, but Alrosa was eventually forced to abandon the effort as the risk of further flooding became too great.

The Mir pipe accounted for 9% of the company's output in the first half of 2016, and Maxim Khudalov, director of corporate rating group ACRA, told S&P Global Market Intelligence in September that the facility's suspension could boost diamond prices by up to 10% by the end of 2017.