Diamond major Alrosa said Tuesday it had agreed a deal with the Russian government, the terms of which were outlined in a decree signed by Russian prime minister Dmitry Medvedev. An independent appraiser valued Kristall at RUB1.886 billion (US$29.3 million), Alrosa said.

A deal has been in the offing for some time. Russia's deputy finance minister Alexei Moiseev previously said he expected it to happen by the end of 2018. Kristall has struggled in recent years, mainly since the abolition of a 6.5% diamond export tariff in September 2016.

If the board approve the deal, Alrosa's management will submit an action plan to develop Kristall by the end of the year.

"On the back of the increasingly complex economic environment, Kristall has been going through some financial challenges in recent years. However, the business maintains its output volumes being Russia's largest producer and exporter of polished diamonds, boasting rich heritage, state-of-the-art equipment, and extensive expertise in rough diamonds cutting," Alrosa said.

Alrosa said the deal would take its share of Russia's polished diamond market as high as 70% from about 20% at present.

"We will focus our efforts on developing new sales channels, including those in the US and Chinese markets, while also improving production efficiency by leveraging the latest diamond processing technologies, automating routine operations, and creating competence hubs to bring together high-tech equipment and industry professionals," Alrosa said.