Mozambique Govt. Officials, Gemfields, Amidst Social Unrest. Country’s Youth Protesting Mineral Resources Funding only those in Power
GEMFIELDS, MINERAL RESOURCES, & GOVERNMENT SERVICES
Having been made aware through several very recent press releases from Gemfields (see below) of attacks on MRM property near the ruby mines in northern Mozambique, we closely examined the country’s current political chaos and were once again reminded of an old wound that has not yet healed. (MRM – Montepuez Ruby Mining Limitada – 75% owned by Gemfields)
… for Only Those in Power
Clemente Carlos, Mozambique journalist and social activist, speaking to SABC news (see video below) on December 24th, 2024, notes that the chaos in Mozambique is not just about the contested election results, “this is about service delivery.”
“For the past 50 years (since independence from Portugal) the Frelimo government has been ‘eating the money’ that belongs to the people – the masses,” says Carlos. “They have been sending their children overseas to study in the UK and the US, living lavish lifestyles, buying houses in Europe and in Dubai, living like Kings and Queens in Mozambique, while most of the people in Mozambique are living under the poverty line.”
According to Carlos, Maputo, the nation’s capital in the southern most territory of the country, is the only city that is considered modern. Everywhere else in the country is underdeveloped. “And THIS is what the revolt is really about,” says Carlos. “The election is being used as a scapegoat, to actually unleash the anger of the people … mostly young people who have never eaten a decent meal, or have had decent clothing, or have had any decent education.”
Carlos blames those in power. “Those in government, those in power, are working only for themselves. And this is what has brought about the generalized anger and revolt.” The election results were only the catalyst to the larger problem.
“It’s not just about ‘electoral truth,'” says Carlos. “It’s about service delivery. It’s about the young people coming out and demanding their rights, because they know that all of the mineral resources – which only the rich possess – belongs to the masses. But unfortunately, it’s just a small group who’s benefitting from it.”
LONDON, 23 DECEMBER 2024
Current Situation in Northern Mozambique – MRM (Montepuez Ruby Mining Limitada – 75% owned by Gemfields)
Gemfields has several operations in Mozambique’s northernmost province of Cabo Delgado, the largest being Montepuez Ruby Mining Limitada in Mozambique (“MRM”) and which is 75% owned by Gemfields.
According to one recent Gemfields press release, “on December 23rd, groups associated with illegal ruby mining, set fire to community buildings built by Montepuez Ruby Mining Limitada. These incidents took place in and around Namanhumbir, a village immediately adjacent to MRM’s principal residential infrastructure (‘MRM Village’).” According to Google Maps below, Namanhumbir borders the northern side of MRM’s Mine Camp, with Gemfields’ Montepuez Ruby Mine just a very short drive south. (See maps below.)
The list of damages in Namanhumbir, include:
a. setting fire to the Namanhumbir police station;
b. setting fire to the offices of MRM’s Operational Grievance Mechanism;
c. setting fire to the MRM Community Centre;
and d. setting fire to the Community Radio Centre built by MRM.
Tragedy Again – at Least 2 Dead
More from another recent Gemfields press release, “on December 24th, over 200 people staged an attempt to invade the MRM Village. During their approach, they set fire to external structures built by MRM, containing, among other things, a ‘community cash point.'”
“Security forces comprising both the Mozambican police and military protected the MRM Village using a staged escalation of force. Tragically, during the course of the morning, two individuals staging the attempt on MRM Village were shot, subsequently taken to the Montepuez district hospital and declared dead.”
“In the village of Wikupuri, some 5km east-northeast of MRM Village, and which was constructed by MRM as a resettlement village, the instigators set fire to:
a. the Wikupuri police station;
b. the residence of police commander;
and c. the administrative offices of Namanhumbir district.”
Deadly Use of Force – The History of Blood Rubies Repeats itself
This deadly use of force brings back memories from not too long ago, a history that Gemfields has been trying to keep in the past. For those unfamiliar with this dark history, here are three reports that covered the events of the past:
–100Reporters’ The Blood Rubies of Montepuez: Troubling Pattern of Violence and Death for Responsibly Sourced Gems
-Aljazeera’s Mozambique’s Gem Wars
-and amaBhungane’s Moz villagers digging for rubies ‘shot and left to die’
Misinformation Campaign
In a related article, published by Creamer Media’s Mining Weekly, conflicting stories from Gemfields are swirling around the activities leading up to and following the killing of two men at or near the Gemfields Montepuez ruby mine. The official press release says that two were shot “staging the attempt on MRM Village,” but the Creamer Media report headline says two were shot storming the mine. You can read this story here: Mozambique police shoot two as Gemfields ruby mine is stormed.
In the midst of all of this, there was an auction to report, and a business bottom line to protect
Gemfields – Cutting Costs Post Auction Results
“Following Gemfields’ most recent emerald and ruby auctions (the results of which were published on 22 November and 12 December 2024 respectively), the Group announces that it has taken, and will continue to undertake, actions to cut costs and streamline business activity amid four key challenges being encountered concurrently, while maintaining focus on the Group’s principal growth project, completion of the second ruby processing plant at Montepuez Ruby Mining Limitada in Mozambique (‘MRM’).”
“Revenues are lower than the company has experienced in recent years due to three principal factors:”
1.Competition [from Grizzley*] – “disturbed emerald market dynamics arising from an oversupply of Zambian emeralds at discounted prices by a competing Zambian emerald producer during the second half of 2024, compounded by conflicting auction dates and giving rise to a poor Zambian emerald market outlook during the first half of 2025”
2.Mozambique Production – Lower Quality – “lower production of premium rubies at MRM”
and
3.China’s Economy – “a weaker luxury and gemstone market generally given economic difficulties in China and geopolitical turbulence.”
*Grizzley Press Release – see sperate Roskin Gem News Report Newsletter post.
Mozambican Civil Unrest – One of Several “Transient Challenges”
“The fourth challenge the Company faces relates to the ongoing civil unrest and associated supply chain and logistics interruptions in Mozambique as a result of the contested general election. While mining operations at MRM have thus far remained unaffected, the overall operating risk profile has increased with the Company’s priority remaining the safety and security of Gemfields’ employees, contractors and community members.”
the Press Release Continues…
“As a result of these four challenges, each of which management views as being transient, Gemfields is enacting Group-wide actions to cut costs and streamline the business.”
These actions include:
1.Suspending Mining at Kagem – suspending, for a period expected to be up to 6 months, all mining at Kagem Mining Limited (“Kagem”), the emerald mine in Zambia which is 75% owned by Gemfields. Instead, Kagem will focus on processing ore from Kagem’s significant ore stockpile utilising the recently upgraded processing plant;
2.Halting all Non-Essential Spending in Mozambique – halting all non-essential spend and suspending planned capital expenditure at its ruby development assets in northern Mozambique, namely Megaruma Mining Limitada (“MML”) and Campos De Joia Limitada (“CDJ”). Eastern Ruby Mining (“ERM”) will continue core developmental work but will delay the capital expenditure associated with its originally planned processing plant;
3.Halting Gold Project – halting operations at Nairoto Resources Limitada (“NRL”), the gold project situated north of MRM and seeking potential buyers. Interested parties should contact [email protected];
4.Assessing Fabergé – Assessing strategic options in respect of Fabergé, the iconic luxury-brand owned by the Gemfields Group;
5.Closely Monitoring Working Capital – and targeted rationalisation of operations and businesses across the Group. Gemfields continues to closely monitor its working capital as it navigates the prevailing challenges regarding the October 2024 election.
Creamer Media’s Mining Weekly
Gemfields Reports Positive Auction Results in Current Market Conditions
According to Creamer Media’s Mining Weekly report, “Gemfields recorded revenues of $46.2-million from its latest auction of mixed-quality rough ruby recovered at the Montepuez ruby mine, in Mozambique.”
“Of the 102 lots on offer, 97 were sold.”
Lower Quality / Lower Revenue
“A lower quantity of ‘premium’ rubies on offer was the key driver of the lower auction revenues, the company points out.”
Read the Rest…
You can read the rest of Creamer Media’s report here, but there is one comment we felt should be noted here in the Roskin Gem News Report in light of the above news report:
As it is stated in all auction results, Gemfields notes that “the proceeds of the auction will be fully repatriated to MRM in Mozambique, with all royalties owing to government being paid on the full sales price achieved at the auction.”
This repatriation gives the reader the impression that the Mozambique government is using this money to help its citizens. Yet, as we understand from Clemente Carlos’ report above, the civil unrest may, in part, be due to these funds never actually reaching the hands of the Mozambican people.
