Ruby and emerald miner Gemfields is suspending mining activities at Kagem and halting several operations amid continued market challenges.

These roadblocks include lower production of premium rubies at Montepuez Ruby Mining Limitada in Mozambique (MRM) coupled with a weaker luxury market due to geopolitical tensions and economic uncertainties in China. The group also cited “disturbed” emerald market dynamics arising from an oversupply of Zambian emeralds at discounted prices by a competitor.

Another challenge is an elections-related civil unrest alongside supply chain interruptions in Mozambique.

“As a result of these four challenges, each of which management view as being transient, Gemfields is enacting group-wide actions to cut costs and streamline the business,” the group said.

Specifically, Gemfields is suspending all emerald mining at its 75-per cent-owned Kagem Mining Ltd in Zambia. Instead, Kagem will focus on processing ore from its stockpile using a recently upgraded processing plant.

The company will also stop non-essential spend and suspend planned capital expenditure at its ruby development assets; halt operations at its gold project north of MRM and sell it eventually; assess strategic options in respect of its luxury brand, Faberge; and implement targeted rationalisation of operations across the group.

“Gemfields continues to closely monitor its working capital as it navigates the prevailing challenges. The management remains prepared to take additional cost reduction measures and pursue external funding options as may be required,” noted the company.