The extraordinary story of Greenland Ruby and its production of rubies and sapphires in the remote, snow-covered mountainous terrain of Aappaluttoq, Greenland has been paused for financial reasons while the company looks for a buyer to help resume operations. 

Greenland Ruby announced on August 9 that it has appointed financial advisors Alvarez & Marsal to lead in-court restructuring.  

Arnt Eirik Rørnes, CEO of Greenland Ruby, told JNA, “We have all options open. However, we would like to focus on a sale of the entire company as a going concern: That would mean the entire operation, from mining to manufacturing, including the marketing of the rubies and sapphires.”

The in-court restructuring has become necessary as the company did not succeed in generating sufficient income to service its debt obligations. This is being done in consultation with the company’s largest creditor, Nebari Natural Resources Credit Fund I. Administrators will be appointed to work with the company’s management to identify the best solution for creditors and the company’s future. Petitions for restructuring proceedings will be submitted to the Maritime and Commercial High Court in Copenhagen, Denmark, and the bankruptcy court in Nuuk, Greenland, respectively, and proceedings will commence immediately.

What caused the decline of a robust company employing more than 100 people? According to Rørnes, the issue was mainly related to high costs involved in running the mine 24/7 throughout the whole year, instead of seasonal campaign mining. 

“Because of that, our price for the goods in the market wasn’t competitive enough. With a new investor, we do expect to change the business model, both upstream and downstream,” he explained.

During the restructuring process, the marketing and sales of rubies and pink sapphires will be maintained with some limitations.

Rørnes confirmed that the service company in Bangkok is a separate entity and is not exposed to this process (of restructuring), but the US entity will be included in the current restructuring. The subsidiary in Paris became dormant during a previous restructuring and staff left the company, he added.

The mining facilities in Greenland were temporarily closed at the end of 2022 to reduce the company’s running costs. In 2016, Greenland Ruby acquired the licence for gemstone extraction and the current owners invested close to 1.5 billion Norwegian Kroners (around US$140.1 million) in facilities and infrastructure related to the mining as well as the Greenlandic community, he said.

 “We believe that the specifics around Greenland Ruby – responsible sourcing from mine-to-market – is quite unique, especially given its certification by the Responsible Jewellery Council. It will be up to the new buyer to decide if it follows Greenland Ruby’s sustainable ethos,” he added.