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yi: BW- Russia diamond monopoly to reorganize

SEP. 20 12:39 P.M. ET The head of Russia's state-owned diamond monopoly said Wednesday that the world's No. 2 producer of uncut gems will reorganize and become an open joint stock company within months, after it settles a property dispute with regional authorities.

"The most important goal today is the opening up of the company," Alrosa chairman Alexander Nichiporuk told reporters visiting the company's mines in the Siberian province of Yakutia. "We expect this to happen after solving the question of property and its listing as part of the company's capital."

Nichiporuk also said the company did not plan an initial public offering in the near future -- something that has long been rumored -- though he did not rule out the possibility.

"Today this question is not on the agenda," Nichiporuk said. "Which form of attracting investment the shareholders choose -- taking credit, issuing bonds or other forms -- lies in the future."

The federal government, the largest single owner of Alrosa, is seeking majority control of the company, the world's second biggest diamond miner. Yakutia's republican government owns 32 percent, 8 percent is owned by the republic's districts and 23 percent by other entities.

The federal government has now lodged an appeal with the Supreme Arbitration Court to redistribute the company's assets between it and the Yakutia government.

Alrosa is second in rough diamond production only to Anglo-South African concern De Beers.

Nichiporuk also told reporters the company plans to develop diamond deposits in Guinea, the Democratic Republic of Congo and Canada.

And in a move to diversify its operations away from the diamond business, he said Alrosa would be exploring oil fields in Yakutia as well as abroad -- in Angola -- in combination with state oil company Zarubezhneft.

Copyright 2006, by The Associated Press. All rights

http://www.businessweek.com/ap/financialnews/D8K8MTCO0.htm