Moscow. 28 December. – The diamond miner ALROSA Co. Ltd. targets to expand its underground operations, exploration and activities in mining-related sectors, President of ALROSA A.Nichiporuk said in an interview to the Interfax news agency.

According to him, ‘the 2005 program is formed upon ALROSA’s 10-year development guidelines’.

‘Next year ALROSA will continue to view the expansion of underground mine production as its first priority. Economic aspects and technical issues related to our underground mines will be a major issue for us. Another direction is exploration with an enhanced focus on prospecting. And, thirdly, we have drawn up an elaborate and realistic budget for 2005. It is based on realistic figures of the exchange rate, realistic selling prices for rough diamonds, and will enable us to attain results surpassing our quite successful performance in 2004’, said A.Nichiporuk.

He pointed out that ALROSA has been taking steps to safeguard itself against any external factors, in particular, against stronger ruble. 'We have taken a number of measures to reduce the impact on ALROSA of such factors as the currency exchange rate and rough price fluctuations. Specifically, we have entered into currency hedging agreements and have some pricing reserves. Thus, the company’s stable situation is to be secured, along with growing core product sales’, the ALROSA president added. As was previously reported, ALROSA entered into agreement with Vneshtorgbank and Citibank on currency risk hedging.

A. Nichiporuk also said that next year ALROSA ‘intends to intensify its activities in diamond mining-related sectors’. This is important for the company’s strategic stability that its financial situation be not only entirely dependent on the diamond market, but counterbalanced by opportunities in other markets,’ said he. ‘This concerns diversification in mining-related sectors’.

In 2005 ALROSA is targeting total consolidated revenue of $2.79 billion. Diamond mine output, including ALROSA-Nyurba, is targeted at $2.185 billion. Capital expenditure will be 13.98 billion rubles. ALROSA expects to spend 1.63 billion on exploration.

INTERFAX