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 81,300 carats of premium ruby for the year ended 31 December 2019.
Total auction revenues of USD121.5 million were generated from two auctions during 2019.
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. A total of 541,000 tonnes of rock was handled during the year, including 42,500 tonnes of ore. The wash plant processed and treated 40,300 tonnes of ore during 2019, with 82 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.
Montepuez’s thirteen auctions held since June 2014, have generated US$584 million in total revenues.
The mining operations at MRM comprise several shallow, open-cast pits split between three main operating areas: the Mugloto Block, the Maninge Nice 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 mined-out areas, thereby returning the area to its natural aesthetic.
A total of 2.2 Mct of ruby and corundum were produced during 2019, with a focus on high-quality, low-occurrence deposits which provide premium rubies.
Of the 2.2 Mct of production for the year, 0.9 Mct were recovered from Mugloto secondary ore, 0.5 Mct from Maninge Nice primary ore, 0.2 Mct from Maninge Nice secondary ore and 0.7 Mct from the fines (−4.6 mm material). MRM’s key operational parameters for the 12-month period to 31 December 2019 are summarised in the table below.
Security operations continue to make good progress in registering a significant decline in artisanal mining activity within and around the concession area. Incorporation of supportive security-enhancement equipment, including lighting towers and wireless cameras, has improved surveillance across the site. Patrol teams are using body cameras, which has resulted in improved monitoring of the MRM concession and adherence to the Voluntary Principles on Security and Human Rights.
Health and safety policies and procedures continue to evolve and improve across the operation in order to create a safer and healthier working environment at MRM. Safety training has focussed on toolbox talks, risk-assessing work environments and improving the culture associated with near-miss reporting. No lost-time injuries occurred during the period.
MRM’s community engagement and project 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. Through its community engagement process, the key focus for the community team during this period has been the continuation of existing health and livelihoods projects, as well as the implementation of a number of new projects.
The health of market demand for Mozambican rubies mined by MRM and marketed by Gemfields is amply demonstrated by these record-breaking auction results.
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.
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.