Gemfields Incurs Loss Despite Strong Gem Sales

Gemfields recorded a loss in 2023 as the write-down of its platinum asset outweighed one of its best years for ruby and emerald sales.

The miner expects to report a loss of $2.8 million for the year, compared with a profit of $74.3 million in 2022, it estimated in a trading report update last week. The loss is primarily the result of a $28 million impairment on its Sedibelo platinum operation in South Africa, it noted. In addition, the company had to cancel its November auction of high-quality emeralds due to weak output.

“In what has been a year of both achievements and challenges, Gemfields recorded its second-highest annual revenues alongside seeing record prices being paid for our rough colored gemstones sold at auction,” said Gemfields CEO Sean Gilbertson. “Production of premium rough gemstones has been weaker at both Kagem and Montepuez Ruby Mining compared to 2022.”

The loss was offset in large part by strong sales from the company’s Kagem emerald mine in Zambia and Montepuez ruby deposit in Mozambique, which together led Gemfields to its second-highest revenue. Sales of emeralds came to $89.9 million while revenue from rubies was $151.4 million.

“The total auction revenues in 2023…indicated that the demand for colored gemstones remains strong, despite having one [fewer] higher-quality emerald auction in the year,” the company noted.

Gemfields will hold its first auctions of high-quality emeralds and mixed-quality rubies in the second quarter, it explained. It has also invested in constructing a second processing plant at Montepuez, which it believes will strengthen its ruby business, it added.

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Main image: Rough emeralds from the Kagem mine. (Gemfields)