BBC News: Gold firm boss seeks Russia talks (with Oleg Mitvol)

EXTRACT: Co-founder Mr Hambro said his firm had seen its shares slump by almost a half since Russia’s environment agency – part of Russia’s Ministry of Natural Resources – called for the withdrawal of the company’s 54 licensing agreements. 

The boss of a London-based gold mining company is to fly to Russia for urgent talks on the firm’s future there.

Peter Hambro Mining has seen its shares slump after Russia’s environment agency called for the withdrawal of the firm’s operating licences in the country.

Chairman Peter Hambro told BBC News he planned to meet the agency’s deputy head, Oleg Mitvol.

There are growing fears over apparent moves by Russia to seize back mineral assets controlled by foreign investors.

Energy giant Shell is currently locked in negotiations with Russian authorities over its multi-billion dollar Sakhalin-2 project.

Reports have suggested that the Anglo-Dutch firm will hand over a major stake in the world’s largest oil and gas project to state-run Russian gas monopoly Gazprom, following intense pressure from Russia’s authorities.

‘Skittish market’

  There is an enormous amount of infighting going on within the ministry of natural resources, and unfortunately we are somewhat caught in the crossfire

Co-founder Mr Hambro said his firm had seen its shares slump by almost a half since Russia’s environment agency – part of Russia’s Ministry of Natural Resources – called for the withdrawal of the company’s 54 licensing agreements.

“The problem is that the market is so skittish at the moment,” Mr Hambro said.

“All the problems with (the suspected murder of Alexander) Litvinenko and Sakhalin and so on means that anything to do with Russia is an immediate sell signal.”

Mr Hambro said he did not believe that there was pressure coming from the top of the Kremlin for control of his company’s Russian assets.

But he added: “It very hard to manage a company when an agency oversteps its mark. Mr Mitvol is in charge of the environment, not of production.

“There is an enormous amount of infighting going on within the Ministry of Natural Resources, and unfortunately we are somewhat caught in the crossfire.”

Analysts warned that the current move against Peter Hambro Mining could further damage Russia in the eyes of many Western investors.

“Fundamentally, confidence has been shaken right across the Russian natural resource sector, starting with Sakhalin and now moving to Peter Hambro,” said John Meyer, of Numis Securities.
 
http://news.bbc.co.uk/1/hi/business/6176475.stm
 

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