Illegal miners kill two police officers at Gemfields ruby mine
Montepuez is an open-pit mine, considered the world’s most lucrative ruby operation. (Image courtesy of Gemfields.)Precious stones miner Gemfields (LON: GEM) (JSE: GML) confirmed on Thursday that two police officers were killed earlier this week during an attack at its Montepuez ruby mine in northern Mozambique.
According to the company, about 40 illegal miners marched on the mine gate on Monday and assaulted officers guarding the entrance. No Gemfields employees or contractors were injured, and the company said conditions on site have since remained calm.
Gemfields said it was informed that the attack may have been linked to an earlier incident involving district immigration authorities investigating suspected illegal immigrants in a nearby village, during which one person reportedly died.
The Montepuez operation, located in Mozambique’s impoverished Cabo Delgado province, hosts the world’s richest known ruby deposit. Despite its economic potential, the mine has long been a flashpoint of tension between security forces and local residents, many of whom are unemployed young people drawn to the area’s lucrative gemstones.
In recent weeks, Gemfields said illegal miners have sabotaged supply infrastructure connected to the mine’s new processing plant, which is in its final commissioning phase.
Precious stones miner Gemfields (LON: GEM) (JSE: GML) confirmed on Thursday that two police officers were killed earlier this week during an attack at its Montepuez ruby mine in northern Mozambique.
According to the company, about 40 illegal miners marched on the mine gate on Monday and assaulted officers guarding the entrance. No Gemfields employees or contractors were injured, and the company said conditions on site have since remained calm.
Gemfields said it was informed that the attack may have been linked to an earlier incident involving district immigration authorities investigating suspected illegal immigrants in a nearby village, during which one person reportedly died.
The Montepuez operation, located in Mozambique’s impoverished Cabo Delgado province, hosts the world’s richest known ruby deposit. Despite its economic potential, the mine has long been a flashpoint of tension between security forces and local residents, many of whom are unemployed young people drawn to the area’s lucrative gemstones.
In recent weeks, Gemfields said illegal miners have sabotaged supply infrastructure connected to the mine’s new processing plant, which is in its final commissioning phase.
History of violence
Montepuez has a history of violent incursions and human rights controversies. In 2019, Gemfields paid $7.5 million to settle claims from local families alleging abuses by police and security contractors. The settlement did little to ease hostilities. Months later, more than 800 people stormed the mine, leaving nearly a dozen dead, according to the company. Gemfields also reported that a mob attacked and burned a company vehicle during the unrest.
Operations were again suspended in December last year when over 200 individuals linked to illegal ruby mining tried to invade a nearby residential village.
Shares in Gemfields dropped 1.5% on the news in mid-day trading but recovered shortly after. They were last changing hands at 6.04p, giving the company a market capitalization of 2.3 billion South African rand ($121 million).
Montepuez has a history of violent incursions and human rights controversies. In 2019, Gemfields paid $7.5 million to settle claims from local families alleging abuses by police and security contractors. The settlement did little to ease hostilities. Months later, more than 800 people stormed the mine, leaving nearly a dozen dead, according to the company. Gemfields also reported that a mob attacked and burned a company vehicle during the unrest.
Operations were again suspended in December last year when over 200 individuals linked to illegal ruby mining tried to invade a nearby residential village.
Shares in Gemfields dropped 1.5% on the news in mid-day trading but recovered shortly after. They were last changing hands at 6.04p, giving the company a market capitalization of 2.3 billion South African rand ($121 million).
Petra Diamonds launches $25M lifeline amid market slump
Africa-focused Petra Diamonds (LON: PDL) has launched an £18.8-million ($25 million) rights issue as part of a crucial refinancing strategy aimed at keeping the Africa-focused miner afloat during a severe downturn in diamond prices.
The company confirmed it had reached a long-term refinancing agreement that extends its debt maturities by up to four years. As part of the new terms, Petra introduced a “payment in cash or equity” mechanism, allowing it to pay interest on its notes in shares rather than cash. Interest rates on the notes will increase to 10.5%, or 11.5% if payments are made in equity.
The rights issue, which still requires shareholder approval at a special general meeting on November 6, is a key component of Petra’s internal restructuring. The company expects new shares to begin trading by November 7, pending final agreements.
Interim joint CEO Vivek Gadodia called the move the “final leg” of Petra’s refinancing journey, following 18 months of major internal change. He said the plan substantially strengthens Petra’s capital structure and enables management to focus on executing its business strategy.
The company warned that if shareholders reject the resolutions, the refinancing would collapse. In that case, Petra would not receive the expected net proceeds of about $22.4 million and would not have sufficient working capital for the next 12 months.
Market pains
Weighed down by weak demand, economic uncertainty and the rise of lab-grown gems, diamonds miners have cut costs, halted operations and restructured their business.
Petra has struggled to generate cash flow despite previous asset streaming efforts. Net debt rose to $258 million in the third quarter, up from $215 million at the interim stage.
The company’s shares have dropped 39% year-to-date and 47% over the past 12 months. The company, now valued at £37 million ($49.6m), is trading at 19.1p per share.
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