Gemfields broadens involvement in sapphires, looking to attain De Beers-type status in colored gemstone sector

Sorting for rough emerald’s at Gemfield’s Kagem mine in Zambia.

Gemfields broadens involvement in sapphires, looking to attain De Beers-type status in colored gemstone sector

The London-listed Gemfields company continues its quest to attain De Beers’-like status in the colored gemstones sector, as it seeks to expand its position in the market by adding a strong sapphire portfolio to its already substantial position it the emerald and ruby markets.

It recently was reported that Gemfields is planning to investigate Kashmir sapphire mines in Jammu & Kashmir in India, and acquire colored gemstone mines in Odisha and Jharkhand in India.

In September, Gemfields announced that it has entered into a joint venture with East West Gem Investments, a Jersey registered company, in order to progress opportunities in the Sri Lankan sapphire and gemstone sector via three Sri Lankan subsidiaries.

“We are delighted to announce our entry into what we consider to be the third of the ‘big three’ colored gemstones” said Ian Harebottle, Gemfields’ CEO. “With revenue-producing emerald and ruby operations in Zambia and Mozambique already in the Gemfields portfolio, the proposed development of sapphire operations in Sri Lanka will realize our stated red, blue and green ‘traffic light’ of colored gemstones strategy”.

Gemfields owns the Kagem emerald mine in Zambia, the single largest emerald mine in the world, producing about 20 percent of total supply. The company owns 75 percent of the mine while the remaining 25 percent stake is held by the Zambian government.

In July 2009, Gemfields launched a formal auction program for Zambian emeralds mined at the Kagem emerald mine. To date, the company has held auctions of emerald and beryl produced at Kagem and which have generated revenues totaling of close to $300 million. The Company has also held two traded emerald auctions, of gems not obtained directly from the company’s own mining operations, which generated revenues of $22 million.

Gemfields also owns a 75 percent stake in the highly prospective Montepuez ruby deposit in Mozambique as well as licenses in Madagascar including ruby, emerald and sapphire deposits.

In June 2014, Gemfields held its first auction of rough ruby and corundum produced at the Montepuez ruby deposit, generating revenues of $33.5 million.

In addition, Gemfields holds a 50 percent interest in the Kariba amethyst mine in Zambia.

The company has also extended its reach into jewelry, Gemfields acquired the French-Russian Fabergé brand in January 2013 to create a globally recognized colored gemstone jewelry producer.

For the fiscal year ended June 30, 2014, Gemfields reported revenues totaling $160.1 million, and earnings before tax of $59.3 million. The Kagem mine 20.2 million carats of emerald and beryl for the 12-month period, down by 9.8 million carats compared to the previous fiscal year. Some 6.5 million carats of ruby and corundum were mined, up from 1.9 million carats the year earlier.

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