52 Million US Dollars Generated From Auction of Rubies Mined in Mozambique
- Gemfields sold 90 of 99 lots at its October auction, with buyers snapping up over 92,000 carats of Mozambican rubies
- Demand for premium, fine-quality rubies drove strong results, though the auction was smaller than those held in previous years
- The miner recorded a $125.2 million impairment against its Montepuez asset, raising questions about long-term production
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Gemfields has pulled in $52 million (around R858,000,000) from an October ruby auction, with stones sourced from its Montepuez mine in Mozambique attracting solid buyer interest despite a year marked by supply constraints.
According to reports, the auction ran from 5 to 16 October and saw 90 of the 99 offered lots change hands. Buyers collectively purchased 92,153 carats at an average price of $564.54 (around R9,257) per carat. The company noted that demand was especially strong for larger, fine-quality stones.
Montepuez Ruby Mining, the entity behind the mine, is 75% owned by Gemfields and 25% by Mozambican partner Mwiriti. Proceeds from the sale will be fully repatriated to the mining company in Mozambique, with government royalties calculated against the full auction prices.
A smaller sale with a specific strategy
While the revenue figure signals continued appetite for premium rubies, Gemfields cautioned against reading too much into the average price per carat. The auction was smaller than those held in prior years and contained a higher proportion of top-tier stones, partly reflecting the company's "Trade Select" strategy introduced in June.
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Under this approach, specific gemstone grades and categories are offered in separate sales. Differences in size, colour, clarity and overall stone mix mean that auction results are not always directly comparable from one sale to the next.
Supply remains the bigger test
The stronger question hanging over Gemfields is whether Montepuez can reliably deliver enough premium rubies to sustain meaningful revenue over time. In half-year results published on 30 September, the group flagged the shortage of high-value ruby recoveries as its most pressing operational and financial challenge.
The company recorded a $125.2 million (around R2,053,137,272) non-cash impairment against the Montepuez asset, a write-down that reflects revised expectations for the mine's value rather than a direct cash outflow. Gemfields also reported first-half revenue of $106 million (around R1,749,000,000) and net debt of $44.2 million (around R 724,697,012) before auction receivables. Some of that first-half revenue was boosted by a ruby auction originally scheduled for December 2025 that was pushed into February 2026.
The October result confirms that when premium stones are available, buyers are willing to pay for them. Whether the mine can deliver them consistently remains the central challenge for the business.
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Source: Briefly News
