Gemfields, a London- and Johannesburg-listed gemstone miner, has established a new performance target for its Montepuez Ruby Mining (MRM) operation in Mozambique. The company aims to process 11.39-million tonnes of ore over the three years to June 2029. This target is part of a set of performance measures disclosed by Gemfields alongside its latest long-term incentive awards. The new target comes after a period where MRM processed more ore but produced fewer premium rubies.
In the first half of 2026, MRM processed 1.21-million tonnes of ore, representing a 133% increase from the same period in the previous year. However, premium ruby production fell 13% during the same period. Gemfields has lowered its assumptions for future premium ruby grades and recoveries, resulting in a $125.2m impairment of MRM in the six months to June. Premium rubies account for more than 70% of MRM's revenue, making this decline significant for the company's financial performance.
The MRM operation has been impacted by commissioning and reliability issues with its second processing plant, PP2, which was commissioned in 2025. The company said these issues delayed the plant from reaching consistent operating rates. Despite these challenges, Gemfields remains committed to improving the performance of MRM. The 11.39-million-tonne target is a key component of the company's strategy to enhance operational efficiency and productivity.
Gemfields awarded 51.1-million conditional shares to an executive director and senior employees, linked to financial, operational, and safety targets measured over the three years to June 2029. Twenty percent of the performance-based portion is tied to MRM processing 11.39-million tonnes of ore. Other measures cover adjusted earnings per share, shareholder returns, and the mine's lost time injury rate. This incentive plan aims to align employee interests with the company's strategic objectives.
In its latest interim results, Gemfields reported revenue of $106m for the six months to June but recorded a net loss of $98.5m, largely due to the $125.2m impairment relating to MRM. The company owns 75% of MRM, with the remaining 25% held by the Mozambican government. Gemfields' other main operating asset is the 75%-owned Kagem emerald mine in Zambia.
The new target for MRM is a significant development for Gemfields, as the company seeks to improve the performance of its ruby mining operation. By increasing ore processing, Gemfields aims to offset the decline in premium ruby production and improve its financial performance. The company's strategy will be closely watched by investors and industry analysts.
Gemfields' MRM operation is a critical component of the company's portfolio, and the new target is a key part of its growth strategy. The company's ability to achieve this target will depend on various factors, including the performance of the PP2 processing plant and the recovery of premium ruby grades.
Key points
- Gemfields sets 11.39-million-tonne target for Montepuez Ruby Mining operation in Mozambique over three years to June 2029.
- Premium ruby production at MRM fell 13% in the first half of 2026 despite a 133% increase in ore processing.
- Gemfields recorded a $125.2m impairment of MRM in the six months to June due to lowered assumptions for future premium ruby grades and recoveries.
