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Mineweb.net: Rosprirodnadzor claim on Peter Hambro mining obligations said to be without foundation

Posted: ’07-DEC-06 14:37′ GMT © Mineweb 1997-2006

LONDON (Mineweb.com) –Moscow correspondent, Robin Paxton, writing in the Reuters European Business Wire, Tuesday, noted that shares in Peter Hambro Mining, Russia’s second-largest gold miner, have recovered some of the fall incurred after a representative of the country’s environmental watchdog, Rosprirodnadzor, said last week it wanted five of the company’s licences withdrawn. Subsequently Rosprirodnadzor admitted that three of the five licences in fact belonged to Kongor Chrome, a completely different company.

He reports Vladimir Bavlov, head of Rosnedra — Russia’s federal subsoil resources agency and, like Rosprirodnadzor, a division of the Ministry of Natural Resources – as saying that the Rosprirodnadzor comments were “without foundation and premature”.

Paxton went on to say that Rosprirodnadzor’s claim that Peter Hambro had not fulfilled obligations at licences in the Arctic region of Yamal-Nemetsk may have spooked the market, but it has little material effect.

Mineweb acknowledges that comments made by Moscow Correspondent John Helmer in the Mineweb article dated December 5th could be construed as defamatory of Peter Hambro and unreservedly apologises to Mr Hambro and to the shareholders of Peter Hambro Mining PLC for any consequences thereof and undertakes not to repeat these or similar comments.

In a statement to Reuters, Hambro said “We’re tax payers. We’re royalty payers. We’re creators of jobs and we’re environmentally responsible. I don’t see why anybody would want to stop us doing that”. He pointed out too that Peter Hambro Mining Group had a 2006 research budget of $36 million. Also he went on to say that the Yamal assets, which were referred to specifically in the Rosprirodnadzor statement are also far from the company’s core assets in the far eastern region of Amur, where the company plans to quadruple annual output to 1 million ounces by 2009.

Mineweb considers that it is often difficult in the Russian context to know what the motivations are in some of the sometimes conflicting Ministry announcements. There can be inter-Ministry rivalries and there are times when the Kremlin may have a hand in matters to bring pressure on companies working in the huge country, particularly with respect to emotive commodities like gold and oil.

As the Reuters article went on to note: “Investors in Russian mining might need more convincing that others will not fall foul of Oleg Mitvol, the deputy head of Rosprirodnadzor, whose attacks on Royal Dutch Shell and ExxonMobil have already rattled the oil sector.

“The scale of the market reaction is testament to how nervous investors in the region can be,” John Meyer, director of metals and mining research at Numis Securities is reported as saying. “The Kremlin policy of corralling strategic assets into state or state-friendly companies, evident in energy and aviation, does not favour foreign ownership of prized metal deposits in Russia, which has gold reserves second only to South Africa’s.

This has not stopped foreign investment. BHP Billiton, Rio Tinto, Barrick Gold Corp. and others have signed up for exploration joint ventures in Russia as commodity prices streak to record highs.”

It is Mineweb’s view that Russia is a huge country with substantial mineral resources, but companies need to be very politically aware to progress to what could be huge rewards.  
 

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