March 6, 2017 / 12:48 PM / 4 months ago

Russia appoints son of ex-Kremlin administration chief as Alrosa CEO

2 Min Read

MOSCOW, March 6 (Reuters) - Russia has appointed Sergey Ivanov Jr, son of the former head of the Kremlin administration, as chief executive of state-controlled diamond miner Alrosa, the government said on Monday.

Ivanov's candidacy to lead the world's largest diamond producer was supported by the finance ministry, sources familiar with situation and the ministry have said.

The contract with Ivanov, 36, who has served as a senior vice-president of Russia's largest lender Sberbank since April 2016 and headed insurer SOGAZ before that, will be for three years, a document on a government website showed.

"On the one hand, Ivanov lacks industry experience, but on the other hand he joins from Sberbank's management team, which is well perceived by the market," VTB Capital said in a recent note.

Alrosa's former chief executive Andrey Zharkov is leaving the post ahead of schedule. Zharkov has been in dispute over Alrosa's 2017 budget with the finance ministry, the Kommersant newspaper has said, citing sources.

Alrosa is the world's largest producer of rough diamonds in carat terms. Together with Anglo American's De Beers unit, the two produce about half the world's rough diamonds.

The Russian government sold a 10.9 percent stake in Alrosa last year, raising $813 million to plug holes in the budget as part of a privatisation programme.

The state plans to cut its stake in Alrosa further to 25 percent plus one share by 2019, but the finance ministry has said no sale is planned in 2017.

The federal government and the government of the Yakutia, together with its districts - where Alrosa's main producing assets are based in Russia's far east - currently each hold 33 percent of Alrosa's shares.

The shares were down 0.3 percent in Moscow on Monday, compared with a 0.2 percent rise in the MICEX index. (Reporting by Polina Devitt; Editing by Mark Potter)

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