More than two years ago the Russian government announced that it would sell 20% to 25% of its state-owned diamond mining company, Alrosa, in an initial public offering (IPO). Originally the offering would have occurred in mid-2012 and Alrosa planned on raising $3 billion. A year later than planned, Alrosa was able to raise less than half the capital it sought.

The diamond miner’s IPO went out at the bottom of the expected ranged of RUB35 to RUB38 (about $1.10) per share. At that price, Alrosa is valued at about $8.11 billion. The number off shares on offer was also near the low end of the original plan, and the government kicked in an additional 2 million treasury shares to get the total up from 14% to 23% for the publicly held portion of Alrosa.

According to a report at Reuters, U.S. buyers, including Lazard Ltd. (NYSE: LAZ), took about 60% of the 14% stake in Alrosa that was originally offered.

Alrosa is the largest producer of diamonds in the world measured by value. In 2010 the company produced more than 34 million carats, so it seems reasonable that demand for the stock would be somewhat better.

But investors in Russia have the country over a barrel. The Russian energy economy is not generating enough revenue, and the only thing the government has to sell is more natural resources. It is a buyer’s market, plus the manner in which Russia clawed back its energy sector from BP PLC (NYSE: BP), Royal Dutch Shell PLC (NYSE: RDS-A) and others lets investors force another discount on shares of Russia’s state-controlled firms.

Alrosa shares will trade on the Moscow Stock Exchange.

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