Diamond-miner PJSC Alrosa said it was not yet considering a purchase plan with Gokhran, a Russian state repository of precious metals and stones, to help cushion the impact of the coronavirus pandemic on the sector, despite the suggestion from a key shareholder.

"I believe Gokhran is an option that the company has," the company's CFO Alexey Philippovskiy said, on a June 5 earnings call. "Currently we have about US$1.2 billion, cash, so we are not in any conversations or discussions with Gokhran at this point because, frankly, our liquidity position is very strong and we just don't need this assistance."

The comments come after reports a key Alrosa shareholder suggested Gokhran buy diamonds from it to shore up demand for the miner's output.

However, Philippovskiy said Alrosa has not taken a Gokhran deal off the table, noting it might be an option if another wave of the pandemic hits, further affecting the diamond sector. Gokhran has been a safety net for Alrosa in the past, purchasing about US$1 billion in diamonds from Alrosa amid the 2008-2009 financial crisis.

On the earnings call, Philippovskiy drew a stark picture of the impact COVID-19 has had on the diamond market, with jewelry stores closed and miners curbing diamond output. He said that in the first quarter of 2020 jewelry sales in China, a key market for diamonds, fell by about 20% and 30% and that in the U.S., which accounts for about half of the global diamond market, demand was down about 6% year over year in the first quarter of 2020.

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On the supply side he said Alrosa had taken the brunt of COVID-19's impact on diamond demand. To counter the impact of the pandemic, the company's strategy is to reduce volume, according to Philippovskiy.

There also appears to be signs of recovery, he said. After about a two month shutdown of businesses in China, sales have begun to bounce back, though they are still below last year's numbers and down in other countries.

"As the rest of the world [lagged China] behind with preventive measures and travel restrictions, we saw a significant drop in buying activity in March, April and May," he said.

Philippovskiy said about 30% of global diamond production has been suspended, helping ease a potential supply glut.

In the midstream market, Philippovskiy said diamond polishers shut down for about six weeks, but they have since begun to restart operations "though not at the pre-crisis capacity."

For Alrosa's part, it has reduced 2020 production guidance from 34.2 million carats to between 28 million and 31 million carats.