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Russian diamond miner sale lacks sparkle

Monday, October 28, 2013 - 01:25

Oct 28 - Russian state-owned diamond miner Alrosa raised $1.3 billion in a share sale, a figure at the bottom of a previously announced range, in a government privatisation drive that has been hit by delays and weak investor sentiment. Sonia Legg reports

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It wasn't a glittering success - a share sale by Russian diamond miner Alrosa only raised $1.3 billion - close to the bottom of the offer price range. Alrosa's General Manager is Alexander Malinin. (SOUNDBITE) (Russian) ALROSA GENERAL DIRECTOR ALEXANDER MALININ SAYING: "The IPO demands the company be more open and transparent. It is very important for the diamond industry, because there's tough competition from so-called artificially-grown diamonds." In terms of value, state-owned Alrosa produces a quarter of the world's diamonds. But this privatisation drive was hit by delays and a lack of investor interest. 60% of the 16% stake is thought to have gone to the United States. Malinin insists the investors have spent their money wisely. (SOUNDBITE) (Russian) ALROSA GENERAL DIRECTOR ALEXANDER MALININ SAYING: "All our diamonds are natural, they are all made from raw materials mined by Alrosa. What other advantages do we have apart from our skills to cut diamonds? Our diamonds are "conflict-free", which is very important in world trade." Some say Alrosa's share sale reflects the state of Russia's $2.1 trillion economy. It's growing at its slowest rate in four years. The Finance Ministry had hoped to raise almost $13 and a half billion this year from privatisations. But there have been disputes over which companies should be sold. Alrosa is the only sale so far and it won't even raise the revised figure of $1.5 billion.

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Russian diamond miner sale lacks sparkle

Monday, October 28, 2013 - 01:25