Gemfields takes $125m hit at Montepuez ruby mine

GEMFIELDS expects to report a $73.5m loss for the six months to June after taking a $125.2m impairment against its Montepuez ruby mine in Mozambique, where it recovered fewer high-quality rubies than expected.

The company also increased an impairment taken in its 2025 financial year from $35m to $65m after identifying a further $30m adjustment. It did not explain what caused the adjustment, saying only that more detail would be given with its interim results on September 30.

The latest impairment shows Gemfields’ caution regarding how many premium rubies Montepuez Ruby Mining (MRM) will recover in future. Gemfields said recoveries had been lower than expected during the first half, although there had recently been some improvement.

Interim CEO David Lovett said management was trying to understand why grades had disappointed and was working on mine planning and operating reliability. He said it was still too early to draw firm conclusions. Former CEO Sean Gilbertson resigned in June.

Attention will also be on PP2, the second processing plant at Montepuez. Gemfields said the plant had now reached, and at times exceeded, its planned processing rate, although final commissioning and fine-tuning were still under way.

PP2 was built to increase processing capacity at Montepuez and allow the mine to work through stockpiles faster. It was also expected to give Gemfields more flexibility to process ore from different parts of the large mining licence.

The project has been slow to get going. Its completion was delayed last year by problems obtaining work permits for specialist electrical work and transport difficulties, including damage to a key transformer. Illegal mining also disrupted operations.

Gemfields had already warned in March that the delayed commissioning of the plant was one of the factors weighing on its financial performance, along with weaker gemstone prices and operational interruptions.

MRM generated revenue of $76.1m in the first half, up from $38.9m a year earlier. But Gemfields said the comparison was distorted because a ruby auction originally due in December 2025 was moved to February this year.

Its Kagem emerald mine in Zambia generated $26.7m, compared with $21.1m previously. Gemfields said Kagem performed well and recovered good-quality emeralds, although costs remained high.

Gemfields has been trying to strengthen its balance sheet after a difficult two years. It raised $30m through a rights issue and agreed to sell its Fabergé jewellery business for $50m, while management has made reducing debt a priority.

Lovett said the main task for the rest of the year was to show that the recent improvement in ruby recoveries at Montepuez could continue.

The post Gemfields takes $125m hit at Montepuez ruby mine appeared first on Miningmx.