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Financial Times: War and peace

Published: December 19 2006 02:00 | Last updated: December 19 2006 02:00

The Russian regulatory epic has placed Peter Hambro Mining, the gold miner, somewhat uncomfortably alongside Royal Dutch Shell, still wrangling with Moscow over its Sakhalin-2 project. Rosprirodnadzor, the natural resources ministry’s environmental watchdog, has been casting an eye over both companies’ Russian operations. But, in spite of its British blue-blood name, Aim-listed PHM arguably has more similarities with Polyus, the much larger Russian gold miner whose American Depositary Receipts were admitted to a listing on London’s main market yesterday, than with Shell.

The Polyus listing did not involve new fund-raising. The company, spun off from Russia’s Norilsk Nickel only in March and controlled indirectly by two oligarchs, aims to open itself to new investors, perhaps in the hope that it will eventually merge with one of the west’s big gold-miners. But this is not a simple case of a Russian company exploiting UK openness to foreign listings at a time when plucky British counterparts such as PHM are under fire from capricious Russian regulators.

Peter Hambro, executive chairman and scion of a British banking family, fronts the eponymous company, but it was deliberately conceived in 1994 as a Russo-British partnership with Pavel Maslovsky, deputy chairman, who still owns more shares than Mr Hambro. All but a fraction of its employees are Russian. Polyus, with its UK listing, is converging with PHM from the other direction. To satisfy the London Stock Exchange, it has had to demonstrate transparency and add independent British directors to its board.

PHM’s Russian connections last week helped lift the regulatory threat hanging over the group’s main mining licences. It would be overdoing it to say that the Russian eco-regulator is blind to nationality, but the agency’s scouring of natural resources licences is comprehensive. According to Polyus’s chief executive, oligarchs or no oligarchs, an official inspection of the Russian group’s mines is due to take place in 2007.

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