Strengthening demand for coloured gemstones enabled Gemfields (GEM) to post higher revenues for the year to June, but the company's expansion has come at a price. With more feet on the ground, increased depreciation charges and higher royalty commitments, Gemfields revealed gross profits flat on the previous year at $85m (£56m).
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The margin squeeze was exacerbated by a step-up in marketing initiatives that fed through into reduced earnings. But the miner is steadily and deliberately rebuilding the global market for coloured gemstones in a manner not dissimilar to De Beers' transformation of the retail diamond market in the late 1940s. Needless to say, it's a work in progress.