(Bloomberg) — Russia’s state-owned Far East Development Fund is in talks to create a $1 billion joint venture to invest in the country’s mining industry with China National Gold Group, a government controlled producer of the precious metal.
“We and China Gold will create an attractive financial platform that private investors can take part in and make money,” Alexey Chekunkov, head of the fund, said in an interview in Danang, Vietnam, where he attended an Asia-Pacific Economic Cooperation business forum. “Our first goal will be to invest in gold, precious metals and copper projects.”
The parties may sign an agreement to create the mining fund by the end of the year, he said. The fund will begin with about $500 million before expanding and may make its first investment in 2018. Far East Development and China Gold will each invest $100 million, with a further $300 million from private investors, Chekunkov said.
Chinese investors’ interest in opportunities in Russian metals and mining has grown this year. Russian billionaire Suleiman Kerimov’s family has agreed to sell 10 percent of Polyus PJSC, the nation’s biggest gold miner, to a group led by China’s Fosun International Ltd. for almost $900 million. The deal is expected to be closed next year. Billionaire Oleg Deripaska also sold a $500 million stake in his En+ Group Plc to China’s AnAn Group.
Calls to China Gold’s Beijing headquarters weren’t answered out of office hours and an emailed request for comment went unanswered.
(Story by Ilya Arkhipov and Yuliya Fedorinova with assistance by Martin Ritchie).