Gemfields enjoys increased demand at ruby and emerald auctions

Coloured gemstone miner Gemfields sold $23.6m worth of rubies and emeralds at its latest auctions, noting increased demand and improved sentiment.

The group said on Wednesday that at its commercial-quality rough emerald auction held on April 11-29, revenue amounted to $16.4m at an average price of $6.87/carat. A total of 36 lots were offered for sale, of which 32, or 89%, were sold.

The results marked a notable improvement on the disappointing commercial-quality auction held in September 2024, said Adrian Banks, Gemfields MD of product & sales.

“An increased number of bids and stronger prices across a broad quality range point to improved sentiment and demand since our experience in [the third quarter of] 2024. The overall dollar-per-carat realisation has been positively skewed by the withdrawal of a schedule comprising very low quality material, weighing 112,000g and representing 18.5% of the total weight offering,” he said.

The auction lots were made available for private, in-person viewings by customers in Jaipur. Following the viewings, the auctions took place via an online auction platform specifically adapted for Gemfields that allowed customers from multiple jurisdictions to participate in a sealed-bid process.

The rough emeralds sold were extracted by Kagem, which is 75% owned by Gemfields and 25% by the Industrial Development Corporation of Zambia.

The proceeds of the auction would be fully repatriated to Kagem in Zambia, with all royalties due to the Zambian government being paid on the full sales prices achieved at the auction, Gemfields said.

On Tuesday Gemfields said a mini auction of Mozambican rough rubies from Montepuez Ruby Mining (MRM) held in Bangkok from April 21-25 resulted in revenue of $7.2m.

Twenty of the 21 lots on offer were sold at an average price of $39.47/carat.

Banks said the primary rubies offered were of commercial quality, predominantly in smaller sizes.

“The auction saw strong attendance and robust demand, providing a timely affirmation of the state of the ruby market against the backdrop of tariff-induced uncertainty in global markets,” said Banks.

The gemstones were extracted in Mozambique by MRM, which is 75% owned by Gemfields and 25% by Mwiriti Limitada. The proceeds of this auction will be fully repatriated to MRM in Mozambique, with all royalties due to the Mozambican government being paid on the full sales prices achieved at the auction.

Earlier this month Gemfields said it was seeking shareholder approval to issue $30m worth of new shares in an effort to address its short-term funding dilemma caused by civil unrest in Mozambique.

The company said the proposed rights issue would result in Gemfields issuing 556.2-million new shares and would be underwritten by Assore International Holdings and Rational Expectations, its two largest shareholders.

If granted shareholder and regulatory approval, JSE-listed Gemfields would offer 10 new shares for every 21 existing shares at a price of R1.0680 for SA investors and 4.22p for UK buyers.

Since October last year, the group has faced significant operational challenges stemming from post-election protests in Mozambique, with the increased risk profile putting pressure on Gemfields’ share price.

On top of supply chain disruptions, an attack by insurgents on its MRM mine forced it to temporarily pause mining operations towards the end of last year, preventing the planned construction of a second processing plant at MRM.

To protect the business, the group implemented sweeping cost-cutting measures, including the suspension of operations at Kagem, its Zambian emerald mine, and putting its wholly owned subsidiary Fabergé up for sale.

Once fully operational, MRM’s second processing plant is expected to triple the processing rate, adding considerably to the mine’s ruby production and revenue.

With Jacob Webster

mackenziej@arena.africa