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Mozambican Rubies To Be Auctioned In Singapore

Mozambican Rubies To Be Auctioned In Singapore

About half of the 7 million carats of rubies mined at Mozambique’s Montepuez Ruby Mining will be sold this month at an inaugural ruby auction in Singapore, AllAfrica reports.

British company Gemfields partnered with Mozambican company Montepuez Ruby Mining (MRM) to mine the rubies.

Samora Machel Junior, son of Mozambique’s first president Samora Machel, is chairman
of the board of Montepuez Ruby Mining. Its manager of corporate affairs, Raime Pachinuapa, is the son of Raimundo Pachinuapa, a senior guerrilla commander in Mozambique’s war of independence from Portuguese colonial rule.

The London-headquartered Gemfields describes itself as the world’s largest producer of colored gemstones. An AIM-listed multinational company, Gemfields specialized in Zambian emeralds and amethysts before branching off into Mozambican rubies, AllAfrica reports.

Gemfields said it wants to supply 20 percent of global ruby demand from what could be the world’s largest ruby deposit in Mozambique, Bloomberg reported. The Montepuez mine project is estimated to hold up to 40 percent of the world’s known supply of rubies. Gemfields bought Faberge Ltd. in 2013.

Montepuez Ruby Mining has been exploring gemstone reserves in Cabo Delgado since
2012, according to ClubOfMozambique.

Ian Harbottle is CEO of Gemfields. At a press conference in Maputo Tuesday,  he said he predicts the ruby mines in Montepuez in the northern province of Cabo Delgado will become one of Mozambique’s largest taxpayers, AllAfrica reports.

Harbottle said the rubies will be auctioned off with fair prices and transparency.

“When we sell the Mozambican rubies, we want every cent to return to Mozambique,” Harbottle said. “We want a fair price and we want the money to come back to the company that produced the stones.

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“We want to help build Mozambique, guaranteeing that we comply with the law and that when we export, we do so legally. We are obeying the law. We are paying taxes. Later there will be dividends. These dividends will go the shareholders who made the investment.”

Montepuez Ruby Mining has created 600 local jobs, Harebottle said. The majority of
workers are Mozambicans living within a 40-kilometer radius. Most were previously
artisanal ruby miners, Project Manager Sanjay Kumar said, according to ClubOfMozambique.

Montepuez Ruby Mining initially faced hostility from these local miners, as well as from farmers who live around the sites, but all disagreements have been resolved, Harebottle said.

Until 2013, seven million carats of rubies were mined in Montepuez. Half of these stones will be sold at the Singapore auction, Harbottle said.

Rubies vary greatly in price and quality, AllAfrica reports. Quality is assessed by color, size and cut. Medium-quality rubies can cost $100-to-$400 US dollars per carat. A carat, the standard measure for precious stones, is 200 milligrams.

Better rubies can fetch much higher prices. A Burmese ruby of eight-plus carats sold for $2.2 million in 2005 in New York, setting the record price. That’s about $275,000 per carat.

Even if the Mozambican stones all sell for $100 dollars a carat, the Singapore auction could raise $350 million dollars, AllAfrica reports.

Gemfields said it invested about $30 million in the Montepuez mines.

To date, 8.2-million carats of rubies and corundum have been extracted from Montepuez, according to a May 2 report in MiningWeekly.

This includes more than 7 million carats of rubies since production began at four sites around Montepuez in 2012. Less than half of this will be up for sale at this month´s auction.

The auction will be held June 12 to June 17. Buyers have been invited from colored gemstones market including Israel, Thailand, Germany, India, China and the U.S., ClubOfMozambique reports.