Reuters reported that Anglo-Russian miner Aricom Plc reduced first half loss on Wednesday as it started mining iron ore in the Russian Far East.

Aricom said losses narrowed to USD 2.5 million in H1 of 2008 from USD 5.3 million in the same period last year. It also said its net assets rose 9 % to USD 1.2 billion while cash and cash equivalents and short term investments fell to USD 392 million from USD 498 million at the end of 2007.

Mr Jay Hambro CEO of Aricom told Reuters that "We are now cementing our transition from developer to producer and will be making regular shipments from the end of August or beginning of September. He said that Aricom starting mining at its Kuranakh deposit in the Amur region in June. He added that the company would release studies into its two larger deposits, K&S and Garinskoye in September.”

Mr Hambro said the company's net cash would be enough for another 12 months. Aricom also expects to rise about USD 1 billion in debt to fund the larger projects and has appointed Morgan Stanley to advise it. He said that "We're looking at the availability of funds at the beginning of next year."

Mr Hambro said it was too early to say whether Aricom would post a profit for the full year. Higher overheads, not yet matched by sales, turned a small profit in the second half of 2007 to a loss in the first half of this year. He said that "We're gearing up to be a fully operational company. Our production has not yet caught up. We've a lot more people on permanent contracts and our overheads have risen considerably, but we're not yet in full-scale production."

Mr Hambro said Aricom's regular shipments of saleable product from Kuranakh would comprise 3,000 tonne loads. The company has an offtake agreement with China National Gold Group Corp for up to its entire output, but can also sell its ore elsewhere. He said that "We are confident we will get a significant proportion of the freight premium."

Mr Hambro said the two larger projects, K&S or Kimkan and Sutara and Garinskoye are due to start production from 2010. Aricom had decided to process ore from both mines at a large plant to be built at K&S in the Jewish Autonomous Region.