GEMFIELDS said today renewed violence by ‘insurgents’ in Mozambique were closer to the operations of its 75%-owned Montepuez Ruby Mining (MRM) than in previous events.
In March last year about 60,000 people fleeing jihadist attacks in Cabo Delgado province of Mozambique turned up in the vicinity of MRM. The coastal gas town of Palma, about 150km from MRM’s Montepuez mine, had been overwhelmed by jihadist renegades.
The latest attacks were near Ancuabe, also in Cabo Delgado, but some 65 kilometres “east-north-east” of MRM, said Gemfields. “As such, these attacks are considerably closer to the operations of Montepuez Ruby Mining Limitada,” it said in a statement to the JSE. Shares in the company were 2.8% weaker in London by midday.
The incidents are reported as having occurred between 15km and 40km north of the N1 and N14 roads, the principal route used by Montepuez to travel to and from Pemba, the capital of Cabo Delgado, said Gemfields.
Military escorts were accompanying civilian vehicles on the stretch of road closer to Pemba, the company said.
This follows the murder of two employees of Grafex Limitada, a subsidiary of Australian company Triton Minerals which owns the Ancuabe Graphite Project. “While MRM has implemented certain travel restrictions, its mining and processing operations remain unaffected,” the company said in its announcement.
It added it remain in close contact with Mozambique’s government and that it was “closely monitoring developments”.
Violence at MRM would be an unwelcome turn of fortune’s wheel following a massive improvement in the performance of the company lately.
In March, it declared a maiden dividend of 1.7 US cents (about 25 South African cents) for the year to end December 2021 after what CEO Sean Gilbertson described as an “annus mirabilis” following the dreadful events of 2020 where Gemfields was forced to warn shareholders over threats to its “going concern” status.
The group generated a record $118.1m in free cash flow during financial 2021 and reported a taxed profit of $64.9m after losing $93.2 in 2020. Gemfields transformed the balance sheet taking net debt of $12.6m in 2020 to net cash of $62.9m at the end of 2021.
Gilbertson said Gemfields had been “firing on all cylinders again complemented by the buoyant conditions in the coloured gemstone market”.