Smiling miners at
Gemfields’ Kagem
mine in Zambia
London, England — MININGREVIEW.COM — 18 November 2011 – London-based and AIM-listed  Gemfields “’ one of the world’s foremost coloured gemstone producers “’ says that this year its Kagem mine in Zambia is likely to beat the record 6.6t of emerald and beryl mined in the financial year ended 30 June 2011.

Gemfields CEO Ian Harebottle said in a statement issued on the company website that costs would come down because of efficiency, which would make the company more profitable.

Harebottle said the company had posted a net profit of US$21.4 million on revenue of US$40.2 million in fiscal 2011. It would invest an additional US$10 million this year over its existing costs to move waste materials, and would budget similar amounts for the same activity each year over the next two and half years.

He revealed that Gemfields would increase output by raising the scale of operations, and was also considering starting mining in other known gemstone-producing, licensed areas. The company “’ which in June agreed to acquire a 75% stake in a Mozambican ruby project “’ expected the mine to reach early stage operations in 18 months.

“Very often people think that coloured gems are linked with diamonds. The difference is that the diamond market is saturated and diamonds have been around for a long time, well marketed and well promoted,” he explained.

“Coloured gems, on the other hand, are much more ancient, they have been neglected for a long time and there is a long way to go before they hit saturation point,” Harebottle noted.

He said the average price per carat achieved by the company had increased eight-fold in the last two and half years. “However, while there are indications that prices will continue to rise, the pace of growth is expected to soften “’ the current rate is unsustainable,” he pointed out.

Gemfields recently opened a trading office in London to distribute Zambian emeralds to the markets of the United Kingdom, the United States and Europe. Harebottle said trading was currently a challenge as world markets were “a little bit crazy” at the moment.

“We are in a very exciting time, so we are positive “’ but we have to be cautiously positive because the world is going into uncharted water. It is a new era, a new time,” he stated.
The company is aiming to boost its share of global emerald supply from around 20% currently to around 40% through mining and trading activities in the next five years. Gemfields also expects to supply at least 20% of the world’s rubies, and to have a nice sapphire deposit by that time.