(RAPAPORT) Prime-Tass, ANTWERP: Russia`s ALROSA will take a step towards an initial public offering next month, when its board of directors votes on it becoming an open joint-stock company, with Russia`s federal and state governments controlling about 90 percent of the shares, ALROSA`s president and chief executive Sergey Vybornov said.

"It`s a first step. Then we can think about going public. To do this we may need two years, a one-and-a-half-year timeframe," Vybornov said Tuesday on the sidelines of an industry conference.

If ALROSA does list, it would quickly be the largest publicly-traded diamond miner. The company expects to produce about $2.6 billion to $2.7 billion in diamonds this year, Vybornov said.

Alrosa accounts for about 99 percent of Russia`s diamond production. Russia, in turn, produces about 20 percent of the world`s diamonds.

De Beers, which is the world`s biggest diamond company by sales but is not publicly traded, accounts for about 40-45 percent of the world supply.

Vybornov said that ALROSA`s shareholders – Russian federal and local governments – have been considering the public listing but have not made any concrete proposals. One problem is the lack of precedent for such a large diamond miner to list, he said.

"I have spent a lot of time talking to investment banks and nobody has a clear understanding on how big the free float should be on the first stage. Ten percent would be great," Vybornov said.

It would also be difficult to set a valuation on the company, he said. But the vote by directors November 10 is expected to approve a move away from its present closed structure, which prevents shareholders from selling a stake in the company on the open market. The vote also will settle the ownership structure, with the federal government taking 50 percent plus-one-share controlling stake in the company, he said.

Dozens of diamond miners have listed publicly since De Beers went private in 2001, but most are smaller exploration companies.

Copyright © 2007 Prime-Tass. All Rights Reserved.