The Montepuez ruby deposit is located in the northeast of Mozambique within the Cabo Delgado Province, believed to be the most significant recently discovered ruby deposit in the world, covering an area of 34,966 hectares. MRM is 75% owned by Gemfields and 25% owned by local Mozambican minority partner, Mwriti Limitada.
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MRM produced 46,900 carats of premium ruby for the five-month period since acquisition to 31 December 2017.
MRM’s auction of rough rubies held in June 2018 achieved revenues of US$71.8 million, an all-time Gemfields auction record.
The Montepuez deposits were discovered in 2009. Gemfields’ involvement commenced in June 2011 when a joint venture agreement was signed between Gemfields and Mwiriti Lda, the original title holder, and Gemfields acquired 75% of the Montepuez mine. It is generally recognised as one of the world’s largest known ruby and corundum deposits and the single largest producing ruby mine.
Montepuez Ruby Mining Limitada (“MRM”) received a 25-year mining and exploration licence from the Mozambique Government in November 2011, following which an amalgamation of concessions completed (concession numbers 4702 and 4703, now 4703C), which is valid up to November 2036 and covering an area of 340sq. km.
Gemfields, together with MRM, aim to lead a sector that has historically remained unregulated and largely illicit, by showcasing the benefits of a more systematic, modern and transparent approach to coloured gemstone mining so that the industry becomes more responsible and legitimate, providing sustainable long-term social, economic and environmental benefits to both the country and local communities.
Since commencement of its operations in February 2012, MRM has made a total investment of US$130 million in the project and has contributed an amount of US$73 million to the Mozambican Government in the form of taxes and royalties, until 30 June 2017.
Gemfields implemented an innovative grading and auction system for selling its rough gemstones. The auctions are held in secure locations with the material separated into homogenous lots and certified as either having been produced by Gemfields or obtained by Gemfields from third parties. The world’s leading rough gemstone buyers submit sealed bids for individual lots. A sale occurs if the highest bid received exceeds a pre-determined, but undisclosed, reserve price. The auctions have brought a level of professionalism and transparency previously not seen in the industry.
As there was no industry standard for evaluating rough coloured gemstones, Gemfields established its own grading system to assess each gem according to its individual characteristics (size, colour, shape and clarity). This approach has been instrumental in providing buyers with confidence in the consistent quality of the material on offer. Gemfields used this grading system to develop two auction classes, one offering higher quality gemstones and the other for the larger volume of lower quality gems.
Gemfields have held two ruby auctions during its 2017 financial year and one so far during 2018, which have comprised of rough gems sourced from its Montepuez ruby deposit in Mozambique.
Montepuez’s eleven auctions held since June 2014, have generated US$463 million in total revenues.
The mining operations at MRM comprise a number of shallow, open-cast pits split between four main operating areas: the Mugloto Block, the Maninge Nice Block, the Maninge Nice East Block and the Glass Block. Mining is carried out as a conventional open pit operation utilising excavators, loaders and articulated dump trucks. Loaded trucks haul ore to stockpiles adjacent to the processing plant, while waste is backfilled into excavated areas, returning the area to its natural aesthetic.
A total of 2.43 million carats of ruby and corundum was produced during the period, with a focus on high-quality, low-occurrence deposits, which provide premium rubies. Out of 2.43 million carats of production for this period, 1.38 million carats were recovered from Maninge Nice secondary ore, 0.54 million carats from Mugloto secondary ore, 0.49 million carats from the fines (<4.6mm material) classified in Jaipur India, and 0.02 million carats from other test pits.
Security operations continue to make good progress, registering a significant decline in illegal mining within and around the concession area. Incorporation of supportive security enhancement equipment, including lighting towers and wireless cameras, has improved surveillance across the site. An Electronic Seal Register is now in operation which automatically records seal numbers of critical product and inventory. During the period, patrol teams began using body cameras, which has resulted in improved monitoring of the MRM concession.
Health and safety policies and procedures have been developed and incorporated into all aspects of the business with the intention of creating a safer and healthier working environment. During the period, MRM was issued a category A environmental licence. MRM’s HSE management plans were also approved by the Department of Health, Safety and Environment (“MIREM”).
MRM’s CSR activities are aligned with the policies of the Government of Mozambique and supplement the government’s efforts in improving the quality of life of the community. The local community programme, which includes developing community engagement and investment projects, is driven by a local community engagement team, led by experienced professionals. MRM has ongoing and extensive programmes and partnerships with all communities in and around the concession area.
With this transformation into an operating company, the Kagem and Montepuez mines become the foundation upon which we intend to build the future of the Company.
The health of market demand for Mozambican rubies mined by MRM and marketed by Gemfields is amply demonstrated by these record-breaking auction results
MRM has an obligation to compensate the households and other land users who are physically or economically displaced by the proposed mining in its concession area, in accordance with the local legislative requirements.
Please click below to download the Montepuez Ruby Mine’s Resettlement Project Fact Sheet.
The global coloured gemstone market continues to grow soundly and Gemfields has the potential to expand through its existing emerald and ruby businesses, its recently acquired projects and to apply its successful model to other coloured gemstones.