Peter Hambro Mining Plc, the second-largest gold producer in Russia, is seeking investment from a Chinese steelmaker to help fund an iron-ore mining and processing project it bought two months ago.
“We are in talks with several Chinese steel companies, both state-owned and private,” Deputy Chairman Pavel Maslovsky said in a June 19 interview in Moscow. “With one of them we are already discussing technical details.”
London-based Peter Hambro may offer the partner, which it expects to pick “in months,” a minority stake in a venture to develop the K&S and Garinskoye fields, an ore-supply accord, or place orders for Chinese equipment funded by the nation’s banks, he said. Maslovsky declined to identify the potential partners.
China, the biggest buyer of iron ore, is seeking cheaper access to the steelmaking ingredient. The country has called for a 45 percent cut in contract prices because of a slump in global demand, refusing to follow an agreement between Rio Tinto Group and Nippon Steel Corp. to reduce costs by a third.
Peter Hambro, which bought the iron-ore projects through its acquisition of Aricom Plc completed in April, is seeking to cut development costs to below $1 billion, Maslovsky said.
While ore prices have reached bottom and will resume gains, Peter Hambro’s project will be profitable at current levels, added Maslovsky, also the largest shareholder in the company.
Source: Bloomberg
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