THE Russian government is considering turning diamond mining monopoly Alrosa into the nucleus of a giant holding firm to mine all kinds of minerals, reported the Associated Press.

But Alrosa President Alexander Nichiporuk said the government is not considering having Alrosa take over giant Norilsk Nickel, as had been reported earlier this year.

Alrosa is looking for oil in Yakutia and Angola, the latter in partnership with Russian government-owned oil company Zarubezhneft. The company also has diamond mining interests in the Arkhangelsk region and in two fields in Angola, and may do prospecting in the Democratic Republic of Congo, Guinea and Canada.

The Russian government is currently working on increasing is stake in Alrosa to a majority at the expense of the autonomous Republic of Yakutia, which is resisting the move. Nichiporuk said legal challenges to the move should be sorted out after the new year. The company is also to be turned into a joint-stock company and could hold an IPO.
Meanwhile, Alrosa has appealed to the European Court of Justice the European Commission�s ruling that it has to stop selling rough diamonds to De Beers after the beginning of 2009.

Those sales currently constitute 24 percent of Alrosa�s revenue; the court is expected to rule within half a year. Alrosa�s diamond sales were $3.4 billion last year, compared to $2.7 billion in 2004. The AP says that at $1,080 a month, average salaries at Alrosa are almost three times the average for Russia.