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By John Helmer in Moscow

Sergei Vybornov, the chief executive of Alrosa since February 2007, is likely to be replaced, sources close to the company have told Polished prices.com. An announcement is expected to be made before the annual general meeting of Alrosa shareholders, scheduled for three weeks’ time, on June 20.

Vybornov’s spokesman has been refusing to answer his telephone, or respond to questions about the replacement, although Russian diamond industry figures have been speculating about it for weeks.

On Tuesday, Vybornov summoned reporters from Bloomberg to his office in a demonstration that he is still at the helm. He was not asked, and he didn’t say, whether he intends to remain at his post.

Bloomberg reports that Vybornov repeated an earlier announcement, following the last round of executive and shareholder meetings this month, that Alrosa has cut mine output so far this year by 4% from last year’s level. Vybornov was also reported by Bloomberg as saying that about two-thirds of this year’s production will be offered to the state stockpile agency, Gokhran. The state’s buying price has not been disclosed, but it appears to be close to cost.

If this sales plan holds, the sale to Gokhran would represent about $1.6 billion in target value. Altogether, the Alrosa Supervisory Board confirmed on May 14 that it plans $2.1 billion in production value this year; the company does not issue output figures in carats, nor releases an average per-carat price supporting its announcements of production and sales targets.

This suggests that Alrosa is planning to sell to the international market about $700 million worth of rough during the year. In his last public statement, Vybornov told Interfax that he estimates market sales this year will be between $500 million and $700 million in value. The Interfax interview was dated April 22, and posted two days later on the Alrosa website.

Sources close to the company claim that Vybornov remains at his post until a decision on who will replace him has been finalized. In the meantime, the sources say a management cull, recently announced as a cost-cutting measure, has targeted individuals who were appointed by Vybornov. Others close to the company claim that assurances are being distributed to company executives that they will keep their jobs when or if the new team takes charge.

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