Gemfields, which has noted ruby pricing dynamics respond positively to constrained supply, is involved in a dispute with a rival of its Zambian subsidiary while its operations in Mozambique remain unaffected by the ongoing civil strife following disagreements over recent elections in the country.
This comes as a claim has been filed against Gemfields’ 75%-owned Kagem subsidiary in Zambia by rival miner, Grizzly Mining Limited, its sister company Pridegems Mines, and proprietor Abdoulaye Ndiaye.
The claim relates to “alleged unlawful occupation” by Kagem of an area known as Kamakanga House as well as “conspiracy to injure business reputation” and goodwill.
“Gemfields and Kagem believe that these claims are entirely without merit,” said the company yesterday.
“Kagem, which had previously filed its own claim in Zambia against Grizzly, Pridegems and others in mid-November 2024 in relation to another area known as the BISMA licence, is in the process of preparing a robust defence in conjunction with its legal advisers.”
Despite the Zambian dispute, Gemfields’ operations in Mozambique were continuing unaffected by the civil protests and violence that erupted following disputed election results.
“Mining operations in Mozambique remain unaffected by ongoing civil unrest following the contested election,” it explained.
Nonetheless, Mozambique “poses a number of material operating challenges at present, including as a result of the contested election, the arising civil unrest and the associated supply chain and logistics” interruptions.
Gemfields also reported yesterday that it had held an auction of mixed-quality rough rubies during the period November 25 to December 10.
The auction had earned the company total revenues of $46.2 million (R814m), with 97 of the 102 lots offered for sale completed , with the lower quantity of ‘premium’ rubies on offer being a key driver of the lower auction revenues.
Adrian Banks, Gemfields’ managing director for product and sales said the results of this auction represented a positive outcome under current market conditions, despite ongoing economic challenges in China and geopolitical turbulence worldwide.
“These results reaffirm the stability of demand for Gemfields’ rubies, with prices for fine-quality aligning well with the limited supply of these rare and precious gemstones,” Banks said.
“Encouragingly, new entrants with well-developed supply chains placed successful bids in this auction, highlighting a positive outlook across the quality spectrum.”
Although some softer prices and thinner bidding persists, average price per carat of $391.24 attained during the last auction “reached a record high for our mixed-quality ruby auctions, with the withdrawal of a lower-quality lot having only a limited” effect.
The rough rubies auctioned by the company this month were extracted by the company’s 75%-owned Mozambican operation, Montepuez Ruby Mining (MRM).
Proceeds from the auction will be fully repatriated to MRM in Mozambique, with all royalties due to the Government of Mozambique being paid on the full sales price achieved at the auction.
BUSINESS REPORT