MOSCOW, February 2 (RIA Novosti) - The president of Russia's largest diamond producer Alrosa, Alexander Nichiporuk, is resigning from his post, the company said in a press release Friday.

Alrosa said Nichiporuk's decision "arises from the need to fulfill tasks set before him by the company's shareholders."

"These include, primarily, the group's efficient work to carry out the Russian president's instructions concerning the protection of state property in the diamond sector, including the purchase of a large stake from minority shareholders."

Russia's federal government, the largest single owner of Alrosa, is set to increase its current 37% stake in the world's No.2 rough diamond producer to a controlling interest. The government of Sakha (Yakutia), the Russian Far Eastern republic where most of the company's operations are based, owns 32%. Eight percent belongs to Yakutia's provinces, and the remaining 23% is held by the company's staff.

The Kremlin is trying to raise its equity by redistributing the company's capital assets between itself and the Yakut government. It has promised Yakutia a larger share of federal tax revenue and more generous allocations for social and environmental programs. But the republic's government is reluctant to cede control over the company, which accounts for 23% of global raw diamond output.

Last September, Nichiporuk said Alrosa will be reorganized into an open joint stock company once the dispute with the republic's authorities is solved, and that its operations will be diversified from the diamond business into coal and gold mining and exploration of oil and natural gas.