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6 Oct, 2008 01:13

Lure of gold will keep Peter Hambro in Russia

Peter Hambro says that his company intends to stay in Russia at a time when many investors are looking to pull out their cash.

Peter Hambro: “Russia still has the finest natural resources of any country in the world, and however bad the world's economic situation is, the natural resources of Russia are there and will remain there.  That means it’s a wonderful place to consider investment.  But it’s the whole clouds, in the global financial system, that make life so difficult.  We’ve seen huge amounts of money leaving the Russian market.  International investors have run away.  They’ve run away from every market, but they’ve run away from Russia when Russia really needs it.  We’re still there, we haven’t changed our plans.”

RT: Foreign companies can't have more than 49% in developing strategic fields.  Is this share big enough?

Peter Hambro: “When we get the clarity it's bound to become clear that it's safe to invest there.  Certainly as far as our industry is concerned it doesn’t identify what is and what isn’t strategic, and it doesn’t indicate what is and isn’t control, and what level of control. The legislation simply doesn’t show that.  I’m sure that the reality of life, the commercial reality, will obtain.”

RT: Have you had to postpone any investment in Russia?

Peter Hambro: “We haven’t postponed any, but we’ve had to consider whether one might if things get worse. For the moment we are still running the best case.”

RT: So how will the recent financial turmoil affect the demand for gold?

Peter Hambro: “I think that you have to look at the gold market and gold supply and demand in two ways.  One is the paper market, and the other is the physical market.  There is big physical demand for gold. That tells me that the real stuff, real proper gold, is hugely in demand, and people are not interested in paper gold because it's just another promise.”