Gemfields Group Limited, a global leader in the mining and marketing of coloured gemstones, has announced the temporary suspension of mining operations at its Kagem emerald mine in Zambia. This strategic move comes as the company grapples with multiple challenges, including market pressures, geopolitical instability, and operational hurdles, while maintaining its focus on critical growth projects.
The emerald market has been particularly affected by an oversupply of discounted Zambian emeralds from a competing producer during the latter half of 2024. This influx disrupted market dynamics, creating a subdued outlook for Zambian emeralds in early 2025. Compounding the issue is a weaker global luxury market, driven by economic difficulties in China and ongoing geopolitical turbulence.
Further exacerbating the challenges, lower production of premium rubies at Montepuez Ruby Mining Limitada (MRM) in Mozambique has also impacted revenue. To add to these pressures, civil unrest following Mozambique’s contested general election has disrupted supply chains and heightened the region’s operational risks, even as mining operations at MRM have remained unaffected.
Focusing on Growth Amid Challenges
Despite these headwinds, Gemfields is forging ahead with its long-term growth initiatives, with particular emphasis on completing its second ruby processing plant at MRM. Scheduled for completion by mid-2025, the plant aims to significantly boost premium ruby production, reinforcing Gemfields’ standing in the global coloured gemstone sector. The project remains on schedule and within budget, a testament to the company’s resilience and strategic vision.
This commitment to growth aligns with Gemfields’ broader “mine and market” vision, which integrates responsible mining with innovative marketing strategies. As the operator and 75% owner of the Kagem emerald mine and the Montepuez ruby mine, Gemfields has established itself as a cornerstone of the global coloured gemstone market.
Streamlining Operations
In light of these challenges, Gemfields has initiated a series of cost-cutting measures and operational adjustments to ensure financial stability:
1. Kagem Mining Suspension: Mining operations at Kagem will be paused for six months, with the mine focusing on processing its existing ore stockpile using an upgraded plant.
2. Capital Expenditure Freeze: Non-essential spending on ruby development assets in Mozambique has been halted, including at Megaruma Mining Limitada and Campos De Joia Limitada, while Eastern Ruby Mining will delay its planned processing plant construction.
3. Gold Project Halt: Operations at Nairoto Resources Limitada, Gemfields’ gold project, have ceased as the company explores potential buyers for the asset.
4. Fabergé Under Review: The luxury brand, renowned for its heritage and design, is undergoing a strategic assessment as part of broader rationalisation efforts.
5. Rationalising Operations: Targeted measures are being implemented across the Group to streamline business activity and improve efficiency.
Looking Ahead
Gemfields acknowledges that these challenges are likely to be transient. By focusing on core operations and maintaining financial discipline, the company aims to navigate the current market landscape while building a stronger foundation for the future.
CEO Sean Gilbertson expressed confidence in the company’s direction, stating, “We are taking proactive steps to address the immediate pressures on our business while ensuring we remain focused on our long-term growth initiatives. The completion of our second ruby processing plant at MRM represents a critical milestone that will deliver significant value to the Group.”
Through its strategic vision and pioneering auction platform, which ensures a reliable supply of coloured gemstones to downstream markets, Gemfields has become a pivotal force in shaping the global coloured gemstone industry. Its leadership in responsible mining, coupled with its ownership of Fabergé, underscores its commitment to innovation, sustainability, and excellence in the luxury market.
By navigating today’s challenges with a measured approach, Gemfields continues to reinforce its reputation as a key player in the world of coloured gemstones.
