Mozambique ruby miner sells $52 million of gemstones as premium stones draw strong demand despite production setbacks

Gemfields has generated $52 million from an auction of rubies mined in Mozambique, securing substantial sales after a year in which shortages of valuable premium stones weighed on its business. The result points to continuing demand for higher-quality gemstones, although it does not establish that the miner’s production difficulties have been resolved.

• Gemfields raised $52 million from a Mozambique ruby auction, selling 90 of 99 lots offered.
• Buyers purchased 92,153 carats at an average of $564.54 per carat, with strong demand for premium rubies.
• The miner faces ongoing supply challenges, with a $125.2 million impairment recorded against its Montepuez asset.
• Future earnings depend on consistent recovery of high-quality rubies, despite recent improvements at the mine.

The auction, held from 5 to 16 October, sold 90 of the 99 lots offered, with buyers purchasing 92,153 carats at an average price of $564.54 per carat.

The stones came from Montepuez Ruby Mining, which is 75% owned by Gemfields and 25% by Mozambican partner Mwiriti.

Auction revenue measures the value of gemstones sold, rather than the profit retained after mining, processing and other expenses.

According to Gemfields’ regulatory announcement published on 19 October⁠, proceeds will be fully repatriated to Montepuez Ruby Mining in Mozambique, with government royalties paid on the full auction sales prices.

The company said demand was particularly strong for larger, fine-quality rubies. However, this auction was smaller than those held in previous years and contained predominantly higher-quality stones.

Its composition reflected both operational challenges and the “Trade Select” sales strategy introduced in June, under which selected gemstone grades and categories are offered separately.

That makes the average price an unreliable standalone measure of wider ruby-market movements. Gemfields cautioned that differences in size, colour, clarity and the mix of stones mean auction results are not always directly comparable.

Demand is holding up, but supply remains the test

The more significant question for Gemfields is whether Montepuez can consistently recover enough premium rubies to turn buyer demand into sustainable earnings.

In its half-year results released on 30 September⁠, the group identified the shortage of premium ruby recoveries as its biggest operational and financial challenge.

It recognised a $125.2 million non-cash impairment against Montepuez, reducing the asset’s carrying value. Such a writedown is an accounting reassessment, rather than an equivalent cash payment, but signals weaker expectations for the asset.

Gemfields reported first-half revenue of $106 million and net debt of $44.2 million before auction receivables. Its results also benefited from a ruby auction postponed from December 2025 into February 2026.

Interim chief executive David Lovett said recent recoveries had shown improvement as a second processing plant became largely operational, but management could not yet conclude that the change was sustainable.

Mozambique benefits from export earnings and royalties, but Gemfields’ long-term returns depend on consistently producing high-quality rubies, not just strong auction sales.