Moscow: The Russian state has secured a controlling stake in the world's number 2 diamond producer Alrosa, Interfax news agency reported today, citing the finance minister.

"Following a (share) issue, the federal government s stake is now 50 per cent plus one share," up from 37 percent, Alexei Kudrin told a government meeting, the news agency reported.

The nationalisation follows a 2001 decree to restore state control in the company at the expense of other shareholders.

Before the share issue, authorities in the far eastern region of Yakutia owned 40 per cent, with other shareholders holding 23 per cent.

The region has long fought government efforts to centralise control over the company, which today provides 25 per cent of global supply, selling 2.86 billion dollars worth of diamonds in 2006.

The government plans to fold Alrosa into a new Russian mining champion, which will have interests in various sectors, including oil, gold and other metals.

Russia has seen a steady drift towards state control in strategic sectors of the economy since former president Vladimir Putin came to power in 1999. In May he was replaced by close ally Dmitry Medvedev.

Source : PTI