Abramovich set to tighten grip on Russia's resources

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The Independent Online

Roman Abramovich, the billionaire owner of Chelsea Football Club, is preparing to tighten his grip on Russia's vast resources industry after a 20 per cent stake in Highland Gold came on to the market.

Mr Abramovich, who already owns 40 per cent of Highland Gold through his Millhouse Capital investment vehicle, is eyeing at least some of the £100m worth of shares that have become available in the company, which is listed on London's AIM but operates in Russia. The stake is being sold by Canada's Barrick Gold, the world's biggest gold producer, which, after nine years as an investor, has decided that Russia – home to the world's second biggest reserves after South Africa, is "non-core to its business operations and strategy".

Mr Abramovich emerged yesterday as one of a series of potential buyers for some, or all, of Barrick Gold's stake in Highland Gold.

"We wouldn't rule out buying part of it, but we think our current 40 per cent shareholding is high enough to represent our interest in the company and give us a say in its management," a Millhouse spokesman said.

Analysts said other potential buyers included Polymetal, the FTSE 100, Russia-focused gold producer, as well as foreign gold miners which already have an interest in the country, such as Canada's Kinross.

Despite Barrick's promise to sell its stake through an "orderly process", shares in Highland tumbled nearly10 per cent after Barrick's announcement, before recovering some ground to end down 4 per cent at 163.5p.

Barrick's decision to sell the stake comes a fortnight after Highland announced it had missed its 2011 production target blaming poorer than expected ore quality at one of its three mines – the Mnogovershinnoye mine in the Khabarovsk region in thefar east of Russia.