AN estimated 60,000 people had “arrived” in the vicinity of Gemfields’ 75%-owned Montepuez ruby mine following an Islamist insurgency in the coastal gas town of Palma in northern Mozambique last week, said the firm’s CEO, Sean Gilbertson.
“We are monitoring the situation,” Gilbertson said, adding that risks of illegal mining and social disruption may be heightened as a result of the displacement. All in all, an estimated 700,000 Mozambicans have fled the insurgency. The Isis-affiliated al-Shabaab group is behind the attacks.
Social unrest is not new to the Montepuez mine. A year ago, Gemfields mothballed Montepuez and heightened security at the premises as it sought to head off a renewal of illegal mining that led to attacks on employees and property damage in February 2020.
Reporting on those developments at the time, Reuters said the miners torched a car belonging to the mine and attacked the car’s occupants with pickaxes. Three employees and a security contractor were injured in the attack.
“It is very difficult to forecast the direct impact other than there is a direct influx of people,” said Gilbertson during the firm’s annual results presentation on Tuesday. “We hosted a visit by the UN body for refugees (known as the Refugee Agency). We don’t think it’s a good idea to put displaced people into a ruby producing area.
“We hope to continue to operate on a regular scale but we are keeping our eye on the situation,” he said.
Gemfields reported almost no ruby production in the 12 months ended December owing to travel restrictions imposed as a result of Covid-19. Production at Montepuez, which was suspended in April last year amid the pandemic, has only just started to resume. Full output was expected in April 2021.
The mine generated total auction sales of $121.5m in 2019 taking total cumulative auction revenue to $584m.
Cabo Delgado, the province in Northern Mozambique affected by the insurgency, has been thrown into disarray. “It was total chaos,” Lionel Dyck, founder of the South African private security company Dyck Advisory Group (DAG), told UK publication, The Guardian following the latest attacks. “They completely wreaked havoc, and there was no evacuation plan.”