There's been steady operational progress at the third-quarter stage from coloured gemstone specialist Gemfields (GEM) , and while negotiations with Zambian authorities continue over the proposed locations of the company's emerald auctions, investors need to re-evaluate their holdings in light of the resurgence of political instability in Mozambique.
Yield from Gemfields' Kagem emerald mine in Zambia fell to 6.5m carats, against 7.9m carats in the corresponding period last year, although grades were up by 17 per cent to 302 carats/tonne. The fall-away in production weighed on unit costs, but Gemfields managed to marginally reduce cash costs to $1.06 (65p) per carat. More importantly, the core infrastructure at the Montepuez ruby mine in Mozambique is largely established with primary stage mining and processing equipment on site and operational, but an increasingly violent campaign by the Renamo opposition movement has revived memories of Mozambique's disasterous 16-year civil war.
