Aricom to invest in 1st Russia-China railway bridge

MOSCOW, Sept 26 (Reuters) Russia-focused miner Aricom Plc plans to start building the first railway bridge between Russia and China after the countries sign an agreement, possibly in November, the company's chief executive said on Wednesday.

The bridge would transport iron ore from an Aricom mining project in Russia's Jewish Autonomous Region to steel mills in China and would also have capacity to transport other commodities, Aricom CEO Jay Hambro told Reuters.

He said the International Finance Corp, the private sector arm of the World Bank and a shareholder in Aricom, had expressed an interest in supplying project finance for the bridge.

''We very much hope to do it as a public-state partnership,'' Hambro said. ''As soon as it's greenlighted, construction can begin.'' Aricom said in a statement accompanying its first-half 2007 results it hoped an agreement between the Russian and Chinese governments on the bridge would be signed in November.

Cost and other details have not yet been fixed.

Hambro said the bridge, which would cross the Amur River near the Russian town of Nizhneleninskoye, would have capacity to carry about 20 million tonnes of year of goods annually from Russia to China.

''We would probably use over half of that,'' he said.

Aricom is developing the K&S, or Kimkan and Sutara, iron ore project in the Jewish Autonomous Region. The Kimkan deposit is due to start operating in 2009 or 2010 and to reach full mining capacity of 10 million tonnes a year of ore by 2010 or 2011.

Hambro added that the bridge would also be available for moving goods in the other direction, into Russia from China.

''It does open up a new route for a lot of other commodity flows.'' To see a FEATURE on the bridge, please double-click on [ID:nL16356514] Aricom, which aims to start mining its first project, Kuranakh, in December, on Wednesday reported a MOSCOW, Sept 26 (Reuters) Russia-focused miner Aricom Plc plans to start building the first railway bridge between Russia and China after the countries sign an agreement, possibly in November, the company's chief executive said on Wednesday.

The bridge would transport iron ore from an Aricom mining project in Russia's Jewish Autonomous Region to steel mills in China and would also have capacity to transport other commodities, Aricom CEO Jay Hambro told Reuters.

He said the International Finance Corp, the private sector arm of the World Bank and a shareholder in Aricom, had expressed an interest in supplying project finance for the bridge.

''We very much hope to do it as a public-state partnership,'' Hambro said. ''As soon as it's greenlighted, construction can begin.'' Aricom said in a statement accompanying its first-half 2007 results it hoped an agreement between the Russian and Chinese governments on the bridge would be signed in November.

Cost and other details have not yet been fixed.

Hambro said the bridge, which would cross the Amur River near the Russian town of Nizhneleninskoye, would have capacity to carry about 20 million tonnes of year of goods annually from Russia to China.

''We would probably use over half of that,'' he said.

Aricom is developing the K&S, or Kimkan and Sutara, iron ore project in the Jewish Autonomous Region. The Kimkan deposit is due to start operating in 2009 or 2010 and to reach full mining capacity of 10 million tonnes a year of ore by 2010 or 2011.

Hambro added that the bridge would also be available for moving goods in the other direction, into Russia from China.

''It does open up a new route for a lot of other commodity flows.'' To see a FEATURE on the bridge, please double-click on [ID:nL16356514] Aricom, which aims to start mining its first project, Kuranakh, in December, on Wednesday reported a $0.8 million loss for the six months to June 2007.

Hambro said the company expected to post its maiden half-year profit in the second half of 2007: ''We intend to be profitable from now on in''.

He said low transport costs relative to supplies from Australia and Brazil would make the company's iron ore sought after in China, which produced a third of the world's steel last year. As well as K&S, it is developing the Garinskoye deposit.

''Iron ore prices have broken through $100 a tonne. The bulk of that is freight,'' he said.

''We're looking at a transport cost of $4.85 from K&S,'' he added, compared with $30-40 from Australia. Aricom's shares, listed on London's Alternative Investment Market pending a planned switch to the main board of the London Stock Exchange this year, fell 2.6 percent on Wednesday.

Cazenove said in a note: ''We believe catalysts such as the start-up of Kuranakh and the move to the main board (with FTSE250 Index inclusion likely to follow) by the end of the year will keep the stock in investors' minds over the next few months.'' To see Aricom's first-half 2007 results statement, please double-click on [ID:nRNSL1094A] To see a recent story about the company's titanium projects, please double-click on [ID:nL20794336] REUTERS PBB GC1605 .8 million loss for the six months to June 2007.

Hambro said the company expected to post its maiden half-year profit in the second half of 2007: ''We intend to be profitable from now on in''.

He said low transport costs relative to supplies from Australia and Brazil would make the company's iron ore sought after in China, which produced a third of the world's steel last year. As well as K&S, it is developing the Garinskoye deposit.

''Iron ore prices have broken through 0 a tonne. The bulk of that is freight,'' he said.

''We're looking at a transport cost of .85 from K&S,'' he added, compared with -40 from Australia. Aricom's shares, listed on London's Alternative Investment Market pending a planned switch to the main board of the London Stock Exchange this year, fell 2.6 percent on Wednesday.

Cazenove said in a note: ''We believe catalysts such as the start-up of Kuranakh and the move to the main board (with FTSE250 Index inclusion likely to follow) by the end of the year will keep the stock in investors' minds over the next few months.'' To see Aricom's first-half 2007 results statement, please double-click on [ID:nRNSL1094A] To see a recent story about the company's titanium projects, please double-click on [ID:nL20794336] REUTERS PBB GC1605