Kinross Gold Corp. has been working feverishly to ensure that its prized Russian mines do not become a casualty of the diplomatic spat between Russia and the West.
During a difficult period in which the company has struggled to placate both sides, federal lobbying records made public in June show that Kinross’s chief executive Paul Rollinson and a lobbyist for the Toronto-based gold miner have had numerous communications with the Canadian government’s top officials, including Prime Minister Stephen Harper’s foreign affairs policy adviser.
The high level of interactions with the federal government comes as investors fret over Western sanctions against Russia, which were imposed in an attempt to curb the country’s aggression in Ukraine.
In April, Kinross hired three lobbyists with ties to Mr. Harper’s Conservative government. The lobbyists include Michael Coates, the chief executive of Hill and Knowlton Canada and a former adviser to Mr. Harper who helped him prepare for elections in 2004, 2006 and 2008.
In the same month, Mr. Rollinson had communications with Mr. Harper’s foreign affairs policy adviser as well as with the deputy minister of foreign affairs, Daniel Jean, and another top diplomatic official, federal records show.
After Mr. Rollinson risked Ottawa’s ire by attending an economic forum in Russia in mid-May, the federal records indicate that Kinross has kept up its efforts. Mr. Rollinson communicated with Canada’s ambassador to Russia, John Kur, later the same month. Mr. Rollinson's lobbyist registration, as well as the registrations of the three consultants, state that the subject of the lobbying is policies and regulations related to the imposition of economic sanctions.
Also in May, Hill and Knowlton Canada president and former Canadian Conservative aide Goldy Hyder communicated with the Canadian government’s deputy minister Mr. Jean.
“We estimate Kinross’s Russian assets are about a quarter of the stock’s valuation,” said Pawel Rajszel, analyst with Veritas Investment Research. “So it’s understandable for the company to take measures to safeguard that value, through political means or otherwise.”
Nearly a third of Kinross’s gold production comes from its two mines in eastern Russia, giving the company ample incentive to avoid alienating either side.
Kinross is one of the world’s largest gold producers and has been operating in Russia for years. The company’s decision not to pull out of the economic forum in May was applauded as savvy by both analysts and academics.
Like many other mining companies, Kinross has overhauled operations and slashed costs to deal with the slump in metal prices. It has also recorded billions of dollars in writedowns related to its Tasiast mine in Mauritania, an acquisition made near the top of the commodity cycle.
The Canadian miner was starting to regain market confidence when the conflict between Russia and Ukraine erupted, thrusting Kinross into an uncomfortable spotlight. Russia is now a source of concern for investors. The company’s stock has dropped 20 per cent since early March, when Russian forces seized Crimea, a long disputed peninsula that was controlled by Ukraine. Kinross shares closed Monday at $4.46 a share.
A spokeswoman for Kinross declined comment. The Canadian foreign affairs office and Mr. Hyder had no immediate comment.Report Typo/Error