MMTC to buy stake in Russian conglomerate Alrosa

The fact that the Indian government is keen on the buy was announced by India's commerce minister Anand Sharma, who met his Russian counterpart, Elvira Nabiullina in June this year. Sharma was in Russia from June 15-18 to attend the St Petersburg International Economic Forum and held bilateral talks with his counterpart. He has conveyed to the Russian authorities  India's interest in Russia's privatisation programme.

India's diamond industry exports 95% of cut and polished diamonds to the global market. Globally, diamond miners are struggling to keep pace with growing demand in emerging economies. Analysts said Alrosa needs the investment more than the others.

"Alrosa may be the world's biggest diamond miner, but production will soon grind to halt unless the firm can raise money,'' said an analyst with a broking house in Mumbai that tracks the firm. He added that lawmakers in the Republic of Sakha in remote eastern Siberia, which own about 40% of the diamond monopoly, agreed to allow the company last October to become public. In May 2009, the federal government had also come to the rescue of the company by purchasing $1 billion worth of diamonds.