Alrosa to Close Belgium & Israel Offices, Form African Holding Company

Russian miner Alrosa told Interfax last week that it will close its representative offices in Belgium and Israel, handing their functions over to local trading firms in those countries. The diamond mining firm commented that the company has diamond sales subsidiaries in Belgium and Israel that are capable of performing these tasks.

Alrosa also revealed that it will form a holding company to manage its Africa-based assets. The African holding will be registered in St. Petersburg and will have branches in African countries – in Angola, for example, where Alrosa has a stake in the Catoca and Kamachia-Kamajiku diamond mining companies and is building a hydroelectric dam on the Chicapa River.

The stated purpose of the holding company is to coordinate Alrosa's assets in Angola and to collaborate with diamond mining companies from other African countries. It will also devise and implement new investment projects, and be involved in companies that sell African-mined diamonds.

Alrosa said it is budgeting for a significantly weaker dollar in 2008, increased costs of setting the new Arctic geological expedition up in Yakutia's Zhigansk district and reduced costs connected with the re-imposition of VAT on rough diamond sales on the domestic market.

Alrosa also expects costs to mount when calculating amortization and property tax connected with the market valuation of the assets of the former Yakutalmaz Production Association, effective from April 1, 2008.