(Company clarifies that investment figure in paragraph five
refers to K&S and Garinskoye mining projects, plus DRI plant and
Garinskoye transport, not only K&S. In paragraph six, company
corrects year to 2010 from 2009 and says dependent on
MOSCOW, Sept 14 Petropavlovsk, the Russian
mining group founded by Peter Hambro and Pavel Maslovsky, has
begun construction of the K&S iron ore project in Russia's Far
East, a future supplier of raw materials to Chinese steel mills.
Its announcement on Monday came the same day as Peter Hambro
Mining (POG.L), Russia's third-largest gold miner, said it would
change its name to Petropavlovsk PLC to better reflect the fact
the London-traded company's assets are located in Russia.
Petropavlovsk is the Russian company that manages the assets
of Peter Hambro Mining, including the Pokrovsky and Pioneer gold
mines and the fledgling Kuranakh iron ore and ilmenite deposit.
The K&S, or Kimkan and Sutara, project in the Jewish
Autonomous Region will produce 4.18 million tonnes of iron ore
concentrate annually when its mining and processing plant
reaches capacity in 2012, Petropavlovsk said in a statement.
The total amount of investment required to build K&S and
another iron ore project, Garinskoye, plus the related DRI
process plant and possible capital expenditure on Garinskoye
transport, would be 59.5 billion roubles ($1.93 billion).
Only 1.3 billion roubles of this headline number will be
spent in 2010 and it is dependent on third-party funding, the
The project was previously being developed by Aricom, a
company spun off several years ago by Peter Hambro Mining before
being re-acquired this year.
Petropavlovsk is also involved in constructing the first
railway bridge between Russia and China across the Amur river.
The Russian part of the project will require investment of 4.2
billion roubles, Petropavlovsk said in the statement.
The bridge could carry 20 million tonnes of goods per year
across the Amur by 2020. Metallurgical products will account for
only 45 percent of these goods, Petropavlovsk said, with oil
products, timber, food and building products also transported.
(Reporting by Robin Paxton, editing by Anthony Barker)