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The Sunday Times: Hambro’s Russian gold

EXTRACT: Its shares yo-yoed last year after a spat with the same government-run environmental authorities that chased Shell around Russia.

April 15, 2007
The Andrew Davidson Interview

Peter Hambro has made a fortune mining in Russia. But with his sons running spin-off companies, is he creating a new family dynasty?

IT is small and oblong, about the size of a key fob, and shiny like those foil-wrapped chocolates at Christmas. Only the heavy weight of it catches you by surprise. Pressed into the metal at the top are the words Credit Suisse.

“It’s a 10-tola gold bar, traditionally imported into India, produced in the Credit Suisse refinery, 99.9% pure,” says Peter Hambro, watching me turn the ingot in my fingers. “Three nines fine,” he adds.

How much is it worth? He grins. Three and half ounces, close to £1,000. Yet it’s smaller than a credit card.

Mine to keep? Sadly not. It’s what Hambro, scion of the famous banking family, is all about. Patrician, 62 years old, he now runs the second-biggest gold producer in Russia, named after himself — Peter Hambro Mining — and part of an extraordinary gamble that he made on a decrepit mining operation near the Chinese border which is now starting to pay off prodigiously.

Besides the gold company, listed in London since 2002, Hambro has spun off a Russian iron-ore company called Aricom, also quoted, and a Russian timber company, which will be floated soon. Iron ore is headed by one of his sons. Timber is headed by another. It’s a second Hambro dynasty in the making.

The first, migrants from Hamburg and Scandinavia, established the Hambro banking business as a pillar of the City of London. “A couple of hundred years as a family-run business,” he says, slapping his hand on a Hambro history that he has pulled from his bookshelf. “It only went wrong when it wasn’t family owned.”

I had originally asked him whether it was a good idea to put your children into a quoted business. Silly question. With the Hambros, business and family always mix. And this Hambro, an Old Etonian buccaneer who was forced to go his own way, likes to take risks with an eye to tradition. It’s a curious cocktail.

But it works. His gold company — eponymously named to reassure early investors — is expected to report impressive results this week. Its shares yo-yoed last year after a spat with the same government-run environmental authorities that chased Shell around Russia.

He calls it “a hiccup”, linked to Aricom’s tender for an iron-ore project that it won in November. “My guess is that competitors tried to destabilise the bid by attacking Aricom through Peter Hambro Mining. Luckily, sense prevailed.”

Now his growing Russian empire can start making him serious money. He owns 6.6% of the goldmining company, and 14.5% of Aricom, giving him about £130m of paper wealth, to add to the £410,000 salary he draws. That’s payback for the years he spent taking nothing out while the business was establishing itself. “Eight years without pay,” he drawls.

What did he live on — that banking family wealth? “My father and grandfather were soldiers,” he says. “I lived mostly on what I could borrow.”

Yet sitting in his wood-pan-elled office overlooking Bucking-ham Palace gardens, Hambro looks more Jermyn Street schmoozer than grizzled mining boss. Pinstriped, once-hand-some, the hair pulled back from a doming forehead, he is a charismatic raconteur, full of stories about his early days in money-broking and his links to the Russian government through the gold markets. That’s what took him to the Pokrovskiy mine after communism collapsed.

It also helped him put together his very singular business. It is Russian-based, with a small office in London to service the City, and Russian-staffed, with just seven westerners among 6,500 employees, yet a British company.

Hambro works closely with fellow founder and deputy chairman Pavel Maslovsky, who owns 24% of Peter Hambro Mining and runs the Russian end of operations from Moscow.

Hambro, for his part, handles investors and media over here. He doesn’t even speak Russian. “Only enough to get me into trouble.” And he doesn’t spend a lot of time in eastern Russia, where conditions can be harsh. Yet his mine has the lowest costs of any gold producer in Russia, and aims to produce 1m ounces by 2009.

Sir Rudolph Agnew, former boss of Consolidated Gold and now a director of Peter Hambro Mining, describes his old friend as a canny entrepreneur with a point to prove. “Peter couples fantastic optimism with great courage,” says Agnew, who adds that Hambro also knew that the Pokrovskiy mine was a risk worth taking. “The fundamentals were very good.”

Those fundamentals were an open-cast mine around which a lot of high-quality research had been done, and a professional Russian team that just needed western capital to get to the gold. Hambro was invited in because he had connections.

“My friends from the old central bank had all wanted to become entrepreneurs and I was the only entrepreneur they knew,” says Hambro drily. He also had that added extra, after making a windfall on a previous mining investment. “Denge, denge,” he laughs, repeating the Russian word for cash.

Listening to Hambro you can forget just how worried many are about the business environment in Russia. Analysts in London like the way Hambro’s business is growing fast and offers good exposure to the price of gold. But they don’t like the political risk of operating in Russia.

Hambro, as you might expect, is dismissive. “They don’t understand. The rule of law is very strong in Russia. It’s a country that’s gone from a command economy to capitalism in very little time without bloodshed. That is a fantastic achievement. And you are seeing a far more stable business environment where the law is applied — by and large — sensibly. There are excesses, but they are aberrations.”

Hambro has his own take on most things, a theme throughout his business life. “Clearing bankers live on their deposits,” he tells me twice, “merchant bankers live on their wits.”

He grew up focusing on the latter, after finding that power in the family firm went down a different line. His father left the British Army to work for the rival Samuel Montagu.

Hambro did start at the family bank, but swiftly struck out to join the money-market broker Smith St Aubyn. Later he made his Russian connections at gold trader Mocatta & Goldsmid.

His boss there, Henry Jarecki, cites Hambro’s charm and his ability to make the complex simple as his greatest strengths. “When you get to know him you want to spend time with him and you know you can trust him — those are things the Russians care greatly about,” says Jarecki. “They need to do business with people who have international experience, but who won’t take advantage of them.”

Yet will the Russians stick by Hambro? Hambro shrugs. “The only guarantee I have is that anything they did to damage the English company would damage their own pocket.”

But getting out, when the business carries his name, could be Hambro’s biggest problem. Some wonder if his entrepreneur-ial style might sit uneasily with what will become a much more corporate enterprise. Others predict that, eventually, a mining giant like Newmont will offer a solution, gobbling up Hambro’s company to hit its own production targets.

By then, he will have other interests to fall back on. He expounds on the prospects for Aricom, run by Jay Hambro, 32. The company’s mines are near the border with China, the biggest consumer of iron ore, and this gives it a huge advantage.

Then there’s the Russian Timber Group, headed by Leo Hambro, 29, with forestry assets the size of Belgium.

Maslovsky’s son Alexei, 28, is treasurer at Peter Hambro Mining. That’s a lot of sons. Hambro smiles. “It gives a degree of continuity if anything should happen to Pavel or myself ,” he says.

Whatever can he mean? Then he shows me his father’s money-clip, with a solid gold $10 coin on one side, and a gold $5 coin on the other.

“He believed that it would buy you an airline ticket out of anywhere,” says Hambro.

In other words, be prepared. Then he slips a wodge of £50 notes back in the clip, and shows me how he can drink vodka from a shot glass on his elbow. The old family would be proud.


THE chairman of Peter Hambro Mining wakes at his flat in Belgravia at 7am. Peter Hambro walks to a local gym and works out with a personal trainer. He is at his desk in the company office in Grosvenor Place by 8.30am.

“I work as chief executive, my partner Pavel Maslovsky [deputy chairman] as chief operating officer. Pavel is more operations, I am more investment. We speak at least four or five times a day.”

Hambro frequently lunches or dines out with investors, often taking them to his favourite restaurant, Mimmo d’Ischia in Belgravia. He stops work by 7.30pm, and returns to his Essex country house on Fridays.


Born:January 18, 1945

Marital status: married, with three sons

School: Eton

First job: trainee, Spicer & Pegler accountants

Salary: £410,000 + bonus

Homes: Essex, Norfolk, Belgravia

Car: black Range Rover

Favourite book: The History of the Countryside, by Oliver Rackham

Favourite music: La Traviata

Favourite film: High Society

Favourite gadget: Black & Decker drill


PETER HAMBRO relaxes by painting. His office in London is decorated with his own watercolours. “I love watercolour painting. I am also very fond of country life, both in Essex and near the sea in Norfolk.” He keeps a small boat on the Norfolk coast. “My great-great grandfather was rector of Blakeney so my grandchildren are the seventh generation of our family to visit.”

He also plays golf at the Royal Worlington and Newmarket. “I can play off a handicap of 18 on a good day,” he says. Otherwise he likes pottering in the garden and spending time with his family. “I am particularly fond of my wife and children and grandchildren.” and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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