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 1.1 million carats for the six months to 30 June 2019 with a stripping ratio of 5.3.
MRM’s mixed quality auction in June 2019 achieved revenues of US$50.0 million, with an average price per carat of US$51.99.
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.
Megarum Mining Limitada (“MML”) holds two ruby-mining titles, 7049C and 7057C, located in the Montepuez District of Mozambique. These titles each share a boundary with the existing MRM deposit and cover an area of approximately 190 square kilometres and 150 square kilometres, respectively.
Based on the findings of auger drilling done during 2017, four potential bulk sampling locations were identified, and bulk sampling commenced in one of them in July 2018, with 117,000 tonnes of rock handled during the year, including 16,000 tonnes of ore. The wash plant that commenced operations in October 2018 processed and treated 4,200 tonnes of ore, with four carats of varying-grade rubies recovered.
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 has held one mixed-quality auction in 2019 so far, in Singapore in June 2019, with revenues of US$50.0 million.
Montepuez’s twelve auctions held since June 2014, have generated US513 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, a number of positive Department of Health, Safety and Environment
(“MIREM”) visits were hosted, and MRM has developed associated environmental management plans to meet regulatory requirements. HSE training has focussed on toolbox talks, risk-assessing work environments, and improving the culture associated with near-miss reporting.
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
Gemfields has unveiled a new ruby sort house at its Montepuez Ruby Mine in Mozambique. The first of its kind in the coloured gemstone industry, it will be on a par with the best diamond facilities in the world.
Please click below to download the full press statement.
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.