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Peter Hambro, AngloGold say Russian bill may hamper investment

Peter Hambro Mining Plc, the third-largest miner of gold in Russia, and AngloGold Ashanti Ltd. said foreign mining investment may suffer if the country limits the ownership of gold deposits by companies from other nations.

President Vladimir Putin's government approved January 31 amendments to a bill that seeks to ban foreign companies from owning a controlling stake in so-called strategic deposits. The bill, which is being debated by parliament, would stop foreign companies from controlling deposits with more than 50 tons of gold reserves. That may deter investment in Russia by international mining companies, said Peter Hambro, Chairman of London-based Peter Hambro Mining Plc, in an interview yesterday at a conference in Moscow organized by the Adam Smith Institute.

„It'll stop people buying existing deposits,” he said. AngloGold Ashanti Ltd. the world's second-largest gold miner, will go ahead with a gold venture it agreed to form with Russia's OAO MNPO Polymetal, said Nicholas Fox, director of Johannesburg-based AngloGold's Russian operations. Independent investments in Russia by AngloGold other than greenfield exploration are „a tough call,” Fox said in an interview at the conference.

The venture between AngloGold and Polymetal, currently 50-50, could be altered to give Polymetal control when bidding for the strategic deposits, Fox said. Fifty tons „seems very low to be a strategic limit for gold and not in proportion with the other commodities,” Fox said. The bill stipulates that for deposits with reserves of more than 70 million tons of oil, 50 billion cubic meters of natural gas or 500,000 tons of copper, Russian shareholders must own at least a stake of 50% plus one share. (Bloomberg)