The global diamond supply chain has been convulsed by the pandemic, prompting Alrosa and its peers to carry on with critically low sales for months. Alrosa's second-quarter sales in carats shrunk by 92%.

The world's largest producer of rough diamonds said its free cash flow turned negative in the second-quarter, leaving its shareholders without a dividend payment for the first half of 2020.

It created a $1.7 billion liquidity cushion by the end of June, providing it with a basis for operations and meeting debt liabilities, Alrosa said in a statement.

Alrosa's July diamond sales dropped 79%, it said earlier this week, but the state help may be on its way as the government is considering buying diamonds from Alrosa worth $500 million-$1 billion to the state precious metals and gems repository Gokhran.

The retail jewellery sector is already showing signs of recovery in the United States and China, Alrosa said on Thursday.

It hopes that purchasing activity of Indian diamond cutters will start to recover in September ahead of the seasonal November-January growth in demand for polished diamonds.

"Obviously, if this scenario materialises, the demand will still be 'cautious' anyway. We also cannot rule out the possibility of the 'second wave' of the virus, which may become a game changer," Alrosa added.

(Reporting by Polina Devitt; Editing by Robert Birsel)