An internal audit by Russia's state-owned diamond producer, Alrosa, has shown that the company possesses 1.28 billion carats of diamond reserves, making it the largest holder of diamonds in the world.

Alrosa CEO Fyodor Andreyev told news outlets that according to the audit, Russia had the largest diamond reserves in the world and added that at current extraction rates, Alrosa would be able to continue producing diamonds for another 40 years.

Some markets analysts question whether the diamond producer will go public given the strong recovery seen in the global diamond market.

"The trends we are seeing in India and China are blowing everything away," Andreyev noted.

Alrosa's net profit for 2010 stood at $415 million. The company had a net debt of $3.5 billion, 13% lower than in 2009.

The Renaissance Capital investment firm reports that Alrosa's diamond sales in 2010 were up 45% compared to 2009 and that 64% of those sales were exports.