Maputo, 20 Oct (AIM) – The London-based mining company Gemfields has recorded total revenue of 52 million dollars as a result of the latest mixed-quality ruby auction held by Montepuez Ruby Mining (MRM).
Gemfields owns 75 per cent of MRM, the main ruby mining company in Mozambique, which employs over 1900people, of whom approximately 95 percent were Mozambican.
In a statement, the company revealed 564.54 per carat was the average selling price, and 90 of the 99 lots offered for sale were sold, representing a sell-through rate of 90.9 percent.
“102,099 carats were offered for sale, of which 92,153 were sold, representing 90 percent of the total. This result will help strengthen the company’s liquidity and support the continuation of its operations during a period marked by significant operational and financial constraints”, reads the statement.
According to the company, in recent times, MRM faced various challenges that have negatively affected production levels and cash flow, including illegal mining, security-related disruptions, lower-than-expected recovery, challenges associated with the commissioning of the second processing plant (PP2), the quality composition of the ruby assortment and delays in value-added tax (VAT) refunds.
“In this context, the auction results demonstrate solid international demand for the different sizes and qualities of rubies offered, despite the auction volume being lower than that of auctions held in previous years”, reads the document.
MRM’s current operating environment is marked by frequent incursions by illegal miners into the concession area, with more than 1,000 individuals estimated to enter the site daily.
“These incursions pose significant risks to the safety of MRM employees, contractors and members of local communities, while also jeopardizing the preservation of ruby resources and negatively affecting recovery rates”, reads the note.
Illegal mining, the company says, does not contribute to the sustainable development of the province. On the contrary, this practice can expose local communities to exploitation, weaken the social fabric and deprive the Mozambican state of essential tax revenue from the exploitation of its mineral resources.
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