Gemfields’ first ruby auction nets $34M

Gemfields held its first auction of rough rubies and corundum from the Montepuez mine in Mozambique from June 12 to 17, netting $33.5 million. London--Gemfields announced Wednesday that its first auction featuring high- and low-quality ruby and corundum from the Montepuez mine in Mozambique realized $33.5 million.

The auction, held from June 12 to 17 in Singapore, sold 91 percent by value, and buyers purchased 1.82 million carats of the total 2.02 million carats offered, meaning the auction sold 90 percent by volume.

It also realized an average per-carat price of $18.43.

A total of 55 companies placed bids during the auction, which is a record for any Gemfields auction. The company also said that a considerable number of participants were attending a Gemfields auction for the first time, with most having close ties to Thailand.

Buyers also hailed from the United States, India, Germany and Israel, many of whom have attended Gemfields’ emerald auctions, indicating some crossover among the gemstone buyers.

The success of the auction can be attributed in part to the development of a “first-of-its-kind” comprehensive grading and sorting system that Gemfields developed for rough rubies, which was based on the proprietary rough emerald grading system used at the company’s Kagem emerald mine in Zambia.

Gemfields also tested various downstream ruby and corundum enhancement processes for lower-quality rough material including heat treatment, which yielded positive results and improved the look of the rough material at a “reasonable cost,” according to the company.

As a result, Gemfields offered both treated and untreated material of lower quality, with all treatments done using industry accepted techniques and fully disclosed.

“Since completing the acquisition of Montepuez, our first ruby deposit, in 2012, we have swiftly brought this greenfield asset into the operational and revenue-generating phases, producing over 8 million carats and simultaneously developing a first-of-a-kind, proprietary ruby grading system,” said Gemfields CEO Ian Harebottle.

“The extension of our transparent and well-regarded auction platform into the ruby trade has been very well received by the market, with an expanded customer base now having access to reliably supplied and consistently graded rough emeralds, beryl, rubies and corundum.”

Proceeds from this auction will be repatriated back to Mozambique, to the Montepuez Ruby Mining Limitada, in which Gemfields owns 75 percent, and to the Government of Mozambique, which owns 25 percent.

Cumulative costs incurred at Montepuez to date, including the cost