Global colored gemstone giant suspends emerald mining, cost reduction and efficiency improvement are still the keywords for 2025
Gemfields Group Limited (Gemfields), a leading global colored gemstone mining and marketing company, has announced that it has suspended mining operations at its Kagem emerald mine in Zambia. The company said this is a strategic move to continue to focus on key growth projects while addressing multiple challenges, including market pressures, geopolitical instability and operational obstacles.
A number of factors have contributed to Gemfields’ recent lower-than-expected emerald and ruby auction revenues:
In the second half of 2024, the industry's oversupply of Zambian emeralds and peers' price cuts had a huge impact on the emerald market, disrupting the market situation and leading to a sluggish outlook for Zambian emeralds in early 2025. At the same time, the slowdown in China's luxury consumption, continued international geopolitical turmoil and the overall weakness of the global luxury market have also made the problem more serious.
Lower production of high-end rubies from the Montepuez ruby mine in Mozambique also weighed on Gemfields’ revenues. Further complicating matters, social unrest following Mozambique’s disputed elections led to supply chain disruptions, heightening the company’s operating risks in the region, although mining operations at the Montepuez ruby mine were not directly impacted.
Despite these challenges, Gemfields remains committed to its long-term growth plans, particularly focusing on completing its second ruby processing plant at the Montepuez ruby mine. Scheduled for completion in mid-2025, the plant aims to significantly increase production of high-end rubies, thereby strengthening Gemfields' position in the global colored gemstone industry. The project remains on schedule and will be completed within budget, demonstrating the company's strategic resilience and foresight.
This commitment to growth aligns with Gemfields’ Mine & Market vision, which combines responsible mining with innovative marketing strategies. As operator and 75% shareholder of the Kagem emerald mine and the Montepuez ruby mine, Gemfields has established itself as a cornerstone in the global coloured gemstone market.
In light of the current challenges, Gemfields has taken a number of measures to cut costs and adjust operations to ensure financial stability:
✦ Kagem Emerald Mine Suspended: Mining operations will be suspended for six months while the mine focuses on processing existing ore stockpiles using an upgraded plant.
✦ Capital Expenditure Freeze: Non-essential spending on ruby development assets in Mozambique, including Megaruma Mining Limitada and Campos De Joia Limitada, will be suspended, while Eastern Ruby Mining will delay construction of its planned processing plant.
✦ Gold project suspended: Gemfields' gold project Nairoto Resources Limitada has ceased operations and the company is looking for potential buyers.
✦ Reviewing Fabergé: Gemfields will conduct a strategic review of its luxury jewellery brands as part of a wider resource integration exercise.
✦ Optimizing business operations: Targeted measures are being implemented across the Group to streamline business activities and improve efficiency.
Looking ahead, Gemfields said these challenges may be temporary. By focusing on its core business and maintaining financial discipline, the company is confident that it can move forward steadily in the current market environment while laying a stronger foundation for the future. CEO Sean Gilbertson said, "We are taking proactive measures to address the current pressures on the business while ensuring we focus on long-term growth plans. The completion of the second ruby processing plant will be a key milestone and bring significant value to the group."
Through its strategic vision and innovative auction platform, Gemfields is a key force in shaping the global colored gemstone industry by ensuring a steady supply of colored gemstones to downstream markets. Its leadership in responsible mining and its ownership of the Fabergé brand will continue to underpin the company’s commitment to innovation, sustainability and excellence in the luxury market.
Fabergé has been commissioned to create Imperial Easter Eggs since the reign of Tsar Alexander III in 1885. These eggs are renowned around the world and are considered one of the greatest jewellery works of art.
In 1917, the Russian October Revolution brought the fall of the last generation of the Romanov dynasty, and Fabergé’s production of imperial eggs came to an end. After the October Revolution, the Fabergé brand experienced numerous trademark disputes. After its reorganization in 2009, it specialized in high-end jewelry. It was acquired by Gemfields in November 2012 and resumed traditional egg production in February 2015. (Source: GJEPC, Luxe.Co)