Gemfields Suspends Emerald Mining and Cuts Spending
December 26, 24
(IDEX Online) - Gemfields is to stop mining at its Kagem emerald mine in Zambia for up to six months as part of a package of measures to cut costs and streamline its business activities.
It will also cut spending on ruby-related exploration and development projects in Mozambique, halt operations at a gold project also in Mozambique, and "assess strategic operations" at Faberge, the iconic jewelry brand it bought in 2013.
Gemfields says it is responding to significant reductions in revenue from its most recent ruby and emerald sales.
Its ruby auctions earlier this month raised $46.2m, down 33 per cent on the previous auctions in June.
And its emerald auctions in November raised $16.1m, down 54 per cent on the auctions in May.
In a strategic update the UK-based company blamed over-supply in the emerald market, lower production at its Montepuez ruby mine and weaker demand for gemstones generally, especially in China.
It also noted that ongoing unrest in Mozambique, where its ruby operations are based, could impact production.
Gemfields restated its position that it was "prepared to take additional cost reduction measures and pursue external funding options as may be required".