Gemfields Reports $93M Loss in 2020 Amid Coronavirus Pandemic

London—The coronavirus pandemic led to the suspension of Gemfields’ mining operations and its regular auction system, severely impacting its bottom line in 2020.

The company just released its full-year financial results, reporting a drop in revenue and slipping into the red amid a challenging year.

For the year ended Dec. 31, revenue was down 84 percent, plummeting from $216.2 million in 2019 to $34.6 million in 2020. And whereas the company earned a net profit of $39.1 million in 2019, it reported a net loss of $93.2 million for 2020.

The lockdowns during the pandemic meant mines had to shut down.

Gemfields suspended activities at its Kagem emerald mine in Zambia on March 30, 2020 and its Montepuez ruby operations in Mozambique on April 22, 2020.

Restrictions on travel and the movement of goods also meant the miner’s clients weren’t selling inventory at trade events and had no need to purchase more.

Gemfields didn’t hold any “traditional” auctions after its February 2020 sale of commercial-quality emeralds, which saw revenues total $11.5 million. 

In November and December, however, the company held a series of “mini auctions” to test the market. 

There were five small emerald auctions in which clients in Jaipur, Singapore and Tel Aviv were allowed private, in-person viewings of mixed-quality lots. 

Each event took place over five days, with bids accepted via Gemfields’ new online auction platform or by email, marking the first time customers have been able to bid for its Zambian rough emeralds online. 

Forty-six companies placed bids, and Gemfields said it achieved revenues of $10.9 million total and a per-carat average of $59.84, noting it found that rough emerald prices and demand have “held up well.”

“Winning bids were in line with and, in some cases, higher than, pre-COVID prices, and the number of bids per schedule increased, which demonstrates good demand,” the company said. 

No ruby auctions took place last year, but Gemfields did start a series of small auctions for rubies in March and expects them to be completed in early April. 

The company said it will continue with this auction model “in the near term” for both its emeralds and its rubies but hopes to return to a more regular auction format in the fourth quarter of this year. 

Meanwhile, operations at both Kagem and Montepuez have resumed, with the latter’s wash plant and sort house starting in mid-February 2021 and those at Kagem beginning mid-March. 

Gemfields said it anticipates operations to reach full capacity by the end of April.