Gemfields profit falls due to lower quality of rubies extracted in Mozambique

25 September 2019

The lower quality of the rubies extracted at the Montepuez mine in northern Mozambique led to the Gemfields group’s profit falling 22% to US$12.4 million in the first half of 2019, the group said in a market statement.

Gemfields’ two main assets are Montepuez Ruby Mining (MRM), in partnership with Mozambican company Mwiriti, Lda, and the Kagem emerald mine in Zambia, with a 75% stake.

MRM’s revenues were down 30.3% to US$50 million, mainly due to the fact that a larger quantity of lower quality rubies was auctioned, with the price per carat falling from US$122.03 to US$51.99, according to CEO David Lovett.

Revenues in the jewellery business through Fabergé fell 44% to US$3.9 million, but the two Kagem mine emerald auctions held during the period generated revenue of US$33.2 million, a year-on-year increase of 57%.

Gemfields also reported that the profit from the sale of emeralds fell by US$5 million due to the Zambian government introducing a new 15% export tax, which added to a 6% mining tax means that the company pays 21% of its revenue to the country’s tax authority. (Macauhub)