Bidding Begins for Russian Diamond Miner

BHP Billiton is to bid for the right to invest in Russian diamond miner Severalmaz along with British company Fleming Family & Partners (FF&P), ALROSA President Vladimir Kalitin told a press conference.

Severalmaz holds a license to develop Europe's largest Lomonosov deposit, whose reserves are estimated at USD 12 billion. A would-be investor is to put USD 344 million in building a factory that will be able to produce USD 200 million worth of diamonds annually.

ALROSA controls 92.3% of Severalmaz, 5.1% belongs to the Arkhangelsk region and the remaining bonds spread among minority shareholders. In June 2003, ALROSA signed a protocol of intent with FF&P providing for the British would finance the development of the Lomonosov deposit.

BHP Billiton has also expressed its interest in the project, Vladimir Kalitin said. A spokesman for the company said it is going to make diamond mining a key direction of its activities because now only one of its subsidiaries, Ekati Diamond Mine in northern Canada, is mining precious stones.