Russia's Usmanov Buys Into an Australian Gold Miner (Update1) By...

Russia's Usmanov Buys Into an Australian Gold Miner (Update1)

By Mark Sweetman and Yuriy Humber

June 27 (Bloomberg) -- The Russian billionaire Alisher Usmanov bought a 12.3 percent stake in an Australian gold producer, Medusa Mining Ltd., in an effort to diversify his investments from steel and iron ore to other metals.

Usmanov's Gallagher Holdings Ltd. paid A$20.1 million ($17 million) for a stake in Medusa, which is exploring for gold and copper in the Philippines, Medusa said today in a statement. Gallagher, an investment vehicle, bought 17.5 million shares and has an option to buy another 7 million by Feb. 1.

``Mr. Usmanov's recent investments have been mainly motivated by an interest in accessing advanced mining technologies,'' Yulia Mazanova, Usmanov's spokeswoman, said by phone in Moscow.

The Uzbek-born billionaire controls Metalloinvest, the world's fourth-largest iron-ore producer, among other businesses. His media holdings include Russia's biggest business newspaper, Kommersant, and the music channel Muz TV. He's also chief executive officer of Gazprominvestholding, the investment arm of state-run OAO Gazprom, the world's largest natural-gas company.

Usmanov's biggest portfolio investment was in U.K. steelmaker Corus Group Plc. The Russian sold his 13.4 percent in December 2004 after Corus shares gained 80 percent in value within a year. Forbes magazine values Usmanov's fortune at $5.5 billion.

Gallagher's cash will help Medusa pay off A$5 million of debt, finance a copper-drilling program and expand exploration, Medusa said in the statement.

Should the investment pay off and probable reserves be confirmed, Medusa might be folded into Metalloinvest, along with Usmanov's minority stakes in Nautilus Minerals Inc. and Mount Gibson Iron Ltd., Mazanova said.