Troubled Greenland Ruby Seeks Buyer
August 11, 24
(IDEX Online) - The owners of Greenland's only ruby mine have appointed administrators to restructure the company and find a buyer as it struggles to re-pay its debts.
Greenland Ruby started commercial operations at the Aappaluttoq mine - which also produces pink sapphire - in the southwest of the country in 2017, but put it on care and maintenance last January, and closed it completely in August.
"Despite successful extraction and substantial investments in facilities and in the Greenlandic community, increased interest rates and inflation have made the gemstones market significantly more challenging in recent years", said Arnt Eirik Rornes, the company's CEO, as he announced the restructuring.
The company, majority owned by Norway-based LNS Group, originally predicted a 10-year life for the deposit.
The Danish-language news website Sermitsiaq said last September that Greenland Ruby had very large stock of rubies in Thailand, but sales during 2022 had been "very low".
At the end of 2022 it had a negative equity of DKK509m ($73m) and a total debt of DKK513m ($74m), it said.
But the company remains hopeful that operations will resume, under a new owner. Rornes said: "The company holds an extraction licence to one of the world's richest ruby deposits and has developed an innovative business model by offering certified and traceable gemstones of the highest quality on a global marketplace.
"The board also considers Greenland Ruby to have an unrealised potential to create jobs and value in Greenland."
Petitions for the restructuring proceedings will be submitted to the Maritime and Commercial High Court in Copenhagen, Denmark, and the bankruptcy court in Nuuk, Greenland, respectively.
Pic courtesy Greenland Ruby.