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Vallabhbhai Shamjibhai Patel tells about the ongoing construction of the Surat Diamond Bourse

The under-construction Surat Diamond Bourse (SDB) is India's second diamond trading hub based at Surat, Gujarat, spread across 35.54 acres with more than 4,000 offices for national & international traders. On the onset, the project which...

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The strategy of regulating the Russian jewellery industry

At the General Meeting of the Russian Jewellers Guild Association held in April, two principally important documents were adopted: The Strategy of Regulating the Jewellery Industry of Russia and The Charter of a Good Faith Taxpayer. Besides, the issues...

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Tracking the provenance and lifecycle of a product is a natural and necessary evolution in our industry

A senior executive with a demonstrated history of working globally at management and board levels, Marcus ter Haar has been the Managing Director at Okavango Diamond Company (ODC), Botswana for about 10 months now, prior to which he held the...

28 may 2018

The Stalin Prize for the creation of the diamond industry in the USSR

13 june 2018

In 2014-2015, the Gornaya Kniga Publishers released a two-volume ‘Russia’s Diamond Book’. In this huge work (1,363 pages!), 2 paragraphs were written about diamond mining in the Ural area in 1946-1953, and only one person of the then Uralalmaz management was mentioned. At the same time, there is a chapter ‘They created the diamond mining industry’ devoted, certainly, to the Yakutalmaz workers. With all due respect to these wonderful workers, it is necessary to make some corrections in the priority in building up the national diamond mining industry.

In December 1952, the Stalin Prize Committee for Achievements in Science, Military Studies and Inventions under the Council of Ministers of the USSR received an application for prize for the work described as ‘The creation of the diamond industry in the USSR’. The application was made by the Ministry of Internal Affairs of the USSR and had a classification mark ‘Top Secret’. The document included a list of eight candidates: N. I. Shemyakin, N. I. Vaneyev, S. P. Starichenko, S. G. Vecherkin, N. N. Orlov, N. M. Surovitskiy, N.V. Marinin, I. I. Skorynin. The first three persons were from the central staff of the Special Principal Administration (CPA) of the MIA. The rest were from the Uralalmaz: Vecherkin was Deputy Head of Business Organizations, Orlov – Chief Engineer, Surovitskiy – Chief Mineral Engineer, Marinin – Chief Mechanical Engineer, Skorynin – Head of the Research-and-Development Laboratory.

The criteria used to award the Stalin Prize included: engineering and manufacture of the first diamond dredger and dredge fleet in the world for the development of channel alluvial deposits, the development and introduction of the national electrostatic separators, as well as the development of the new-type of X-ray units, creation of the technological equipment complex “facilitating the construction of a high capacity diamond extraction factory with a highly mechanized full cycle of the production process”.

The request was well-deserved, and the ministry that pushed it was one of the most influential ones. These worthy people all but certain would be awarded the 1953 Stalin Prize ‘For the creation of the diamond industry in the USSR’. And the issue of the priority in the creation of the diamond industry in the USSR could be regarded as solved. But they were out of luck. Stalin died on March 5, 1953. The very next day, the MIA restructuring started. And in two weeks, the MIA‘s Special Principal Administration was closed down. The Uralalmaz passed to the control of the Ministry of the Metallurgical Industry.

The Minister of the Metallurgical Industry I. F. Tevosyan had never anything to do with diamond mining. However, he had a bone to pick with KGB men: in 1937, his sister Yulia Tevosyan was arrested and died in the prison during the investigation. It is clear that Tevosyan was not willing to promote the ‘outsiders’ and let them be given honorary state awards, besides, they belonged to the ‘punitive institution’. But being a responsible manager, he tried to objectively find out what the diamond industry that appeared all of a sudden and received the Stalin Prize nomination really was. The minister was appalled at the findings.

Being a head of one of the largest industrial ministries, Tevosyan was well aware of the situation with the industrial diamonds in the USSR. It was not a secret to him that the USSR regularly purchased a huge amount of diamonds without obstruction and at greatly discounted prices. For example, on June 15, 1953 Tevosyan sent circular letter No.2117ss to the heads of the Ministry’s structural departments to inform his subordinates about the additional diamond purchases abroad according to Resolution of the Council of Ministers of the USSR No.1486-590ss.

At the same time, the CPA documents that came to Tevosyan showed that the diamond production costs in the Ural area exceeded the average world ones by 200 (two hundred) times! It was hard to escape a predictable conclusion: such a result richly deserved exemplary punishment for squandering the state budget and not the Stalin Prize. And the chances are good that this conclusion rather impressed Tevosyan.

In May 1953, Tevosyan submitted an in-depth report on the diamond industry to comrade G. Malenkov, the Chairman of the Council of Ministers of the USSR, where he proposed a radical decrease in the diamond production in the Ural area, shutting down and closing down a significant number of the diamond mining units. He was reasoning that the Ural diamond production costs were whopping and could not be justified, taking into account easy, excessive by volume and cheap diamond imports. To Tevosyan's astonishment, Malenkov ignored the report.

From the point of view of a person involved in the industry and an economist, Tevosyan was absolutely right. However, he did not take into account one factor. He did not know where the Ural diamonds were sent to. The CPA documents allowed tracking their route just up to the Special Department of the Ministry of State Security, and the union minister’s security clearance did not allow tracking beyond this level. Now we can look through the pages, for example, of the records of interrogation of Genrikh Yagoda and learn how the personal agents working for the leaders of the Soviet special services cooperated with the ‘prominent diamantaire Oppenheimer’, and during Stalin’s day, such contacts were an extremely dangerous secret. Malenkov’s silence could not eliminate Tevosyan’s cognitive dissonance, but he did not push for continuing the discussion.

Diamond mining in the Ural area not only avoided its radical decrease but kept on growing. The decree on awarding the Stalin Prizes was issued in December 1953, but unfortunately, the Uralalmaz workers were not in the lists. In this regard, the Tevosyan's report achieved its goal.

***

Probably, a today’s diamond market expert would say “Well, the diamond industry was nothing out of the way during Stalin’s day! They mined some thousands carats - next to nothing, nowadays, dozens of millions of carats are produced!” It is true. The volumes mined in those days were very low and the technology was not advanced. However, the first aircraft were also slow and flew at low altitudes, and they were made of plywood and fabric and not of the duraluminium and titanium. This does not make the aviation less instructive and interesting. 

Sergey Goryainov, Rough&Polished

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