SOVIET DIAMOND PRODUCTION AND FOREIGN EXCHANGE EARNINGS FROM SALE OF PRECIOUS M

Created: 3/6/1968

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Soviet Diamond Produotion and Foreign Exchange Earnings from Sale of Preclouo Metals end Gene

1. The following analysis io presented in response toon

Ke cGtlcatc that Soviet foreign exchange earnings from the sale of diamonds0estimate ofmillion apparently makes no accounting for the Soviet exporte to the ju3 of more thanillion. In addition, we hove tabulated earnings of/the USSR ofillion from eaWofillion from sales of platinum group metals,illion from the sale of gold. Thus,/our estimate of total Soviet earnings from tho oole of precious aetole afid diamonds0 million. illion cotimetcd innderstated total earnings, largely because diamonds were excluded and becauoegroup exports were not fully accounted for. Data on Soviet gold solan which became available after completion orlso increased the estimate of total Soviet earnings.

According to data published by the Bureau of Mines, the Soviet Union received an averageU per carat of the "cut but unoct" diamonds which they exported to the United StatesU5 respectively. Preliminary data indicate the6 price vaa abouti- The Soviet price for dlamonda rote considerably7 to5 per carat in the US. The price obtained by the ussr for the oole to Dc3eero of uncut gem diamonds is not known.

U. The following paragraphs contain our analysis of the statements of Victor R. TIkhonov in his interview with Frele Welt.

o. "As ofnly the Congo produced more diamonds

than we".

Our previous estimate had given the Soviet Union aproduction than implied by this Rtotement, but the absence ofmethodology limited ouron

anof views among analysts

1 we provisionally reduced our estimate of Soviet output but hove not^reyined It formally. The recent statement by Tikbonor implyingomcwhat in excessillion carats7 lo very much within thefronge of; -ProXlt-icoal estimate and we ore inclined to accept it.

mm

ofprevious information Indicated that the shflrp

of gem stones in Soviot production vas betweenercent andsignificant port of vhich vas reported to be of llTcrtlr

per carat, is ror cut stones and the USSRw> t

probably vithin the range of the estates cxnorted-

pffif

ve have built here has paid for

data indicates that the Soviet diaaond industrythe Boot profitable Soviet industries. U,.Mated, "Not one branoh of industry givesll-capital, investments bavetrcnde in investment indicatediaaond -industry*xontiDuee^;to;ibe highly profitably and has "" -

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