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Russia's Alrosa searches for 8 workers missing after flooding at diamond mine

Kitco News

MOSCOW, Aug 7 (Reuters) - Rescue teams were still searching on Monday for eight workers missing in a flooded underground mine owned by Russian diamond miner Alrosa after one miner was rescued over the weekend.

Parts of the "Mir" ("Peace" or "World") mine in the remote Yakutia region of eastern Siberia flooded on Friday when water seeped in from an open-cast mine above it.

Of the 142 workers underground at the time, 133 were brought to the surface on Friday and a big rescue operation mounted to try to find the others.

Alrosa chief executive Sergey Ivanov told mineworkers on Saturday that the rescue of one of the nine missing miners since then had raised hopes that others could be brought out alive.

Production at the underground mine, which accounts for about 9 percent of Alrosa's annual diamond output, has been halted.

Alrosa is installing extra water pumps to lessen the risk of the search area flooding and clearing ways to the spot where the missing men might be trapped, the company said.

Rescue teams have already inspected around 7 kms (4.3 miles) of tunnels. No casualties have been reported so far.

Some of the miners rescued on Friday took part in the search for the missing men. The company is pumping air into the shafts and has called in a range of experts to help, including climbers.

State-controlled Alrosa is the world's largest producer of rough diamonds in carat terms. Together with Anglo American's De Beers unit, it produces about half the world's rough diamonds.

Alrosa is reviewing its 2017 production plan as a result of the accident and expects to complete the review by Aug. 19. It previously planned to produce slightly more than 39 million carats this year.

VTB Capital said in a note on Monday that Alrosa got about 11 percent of its total 2016 earnings before interest, taxation, depreciation and amortisation (EBITDA) from the Mir mine.

The last time the mine had problems with excess water was in 2014, when production fell 32 percent year-on-year, according to VTB Capital.

But analysts point out that Alrosa has large inventory to partially cover any production losses.

Citi said in a note that Alrosa could also use the International underground mine, 16 km from Mir, to replace some of the lost output, if necessary.

Shares in Alrosa were down 1.9 percent in Moscow on Monday after falling 1 percent on Friday.

(Reporting by Polina Devitt; editing by Katya Golubkova and Adrian Croft)

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