The first auction of rough rubies and corundum from the Montepuez ruby mine, in Mozambique, held in Singapore from June 12 to June 17, brought in revenues of $33.5-million. This was reported by London Stock Exchange AIM-listed Gemfields, which owns 75% of miner Montepuez Ruby Mining Limitada. The remaining 25% is held by Mozambican company Mwirit. Interestingly, investment in the Montepuez project up till now has totalled some $34- million, including Gemfields’ purchase of its three-quarters share in 2012, all the capital costs and all operating costs since the start. Hence, this single auction has made almost all that money back (although there are, of course, royalties to pay).
“We are naturally delighted to announce the stellar results of our first auction of rubies and corundum from Montepuez in Mozambique,” stated Gemfields CEO Ian Harebottle in a press release. “Importantly, the proceeds of this auction will be fully repatriated to Mozambique, to Montepuez Ruby Mining Limitada . . . and with all royalties due to the government of Mozambique being paid on the full sales price achieved at the auction.”
At the auction, the company offered 2.03-million carats, of both high and low quality stones, of which 1.82-million were sold. The average price per carat was $18.43. The gemstones were offered in 62 lots, of which 57 were sold. This amounts to 92% of the lots offered; in terms of weight, 90% of the lots were sold and in terms of market value, 91%.
Some (but not all) of the lower quality rough stones were subjected to enhancement processes before being offered for auction. “[A]ll treated lots being offered using industry-accepted treatment techniques and on a fully disclosed basis,” assured the company. This was the result of the testing of a number of enhancement processes for lower quality rough ruby and corundum stones. One of these processes was heat treatment. “These yielded encouraging results, improving the aesthetics of the rough material at a reasonable cost.”
Bids were placed by 55 companies, which was a record for any Gemfields auction. Many of the bidders had never attended one of the company’s auctions before (Montepuez is the company’s first ruby operation). Most of the newcomers came from, or are closely connected with, Thailand – a country that has long been profoundly involved in the ruby trade. Other bidders (many of whom had attended earlier Gemfields auctions) came from Germany, India, Israel and the US.
“The extension of our transparent and well-regarded auction platform into the ruby trade has been very well received by the market,” affirmed Harebottle, “with an expanded customer base now having access to reliably supplied and consistently graded rough emeralds, beryl, rubies and corundum.” The company expects that its next auction of rough rubies and corundum will take place before the end of the year.
“We would . . . like to thank the Mozambican government for its support, particularly in relation to security and the implementation of prudent policies to foster growth and development of the Mozambican coloured gemstone industry,” he highlighted. “We were pleased that representatives of the Mozambican government were able to visit the auction in Singapore, to witness first-hand what is a landmark achievement for the Mozambican gemstone sector.”
Gemfields describes itself as “the world’s leading supplier of responsibly sourced coloured gemstones,” and also owns 75% of the Kagem emerald and beryl mine in Zambia (acquired in 2008) and 50% of the Kariba amethyst mine, also in Zambia. It holds ruby, emerald and sapphire licences in Madagascar. Further, at the start of 2013, it bought the luxury Fabergé jewellery brand, in order to create “a globally recognised coloured gemstone champion . . . a high-end luxury goods platform and a global brand with exceptional heritage, driving the positioning of precious coloured gemstones”.