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Highlights
- Temporary Halt in Ruby Mining: Gemfields has suspended operations at Montepuez Ruby Mining (MRM) due to civil unrest and security concerns.
- Facilities Damaged by Looters: Over 200 individuals associated with illegal mining caused significant damage to MRM’s infrastructure and nearby vocational centers.
- Gradual Resumption Planned: MRM aims to resume full operations by the end of the year following a phased return to safety measures.
Gemfields Group Limited (LSE:GEM) has temporarily suspended operations at its Montepuez Ruby Mining (MRM) site in northern Mozambique following severe civil unrest. The disruption, which has included looting, arson, and fatalities, highlights the escalating security challenges in the region tied to political tensions.
Details of the Incident
The unrest, which took advantage of political instability in Mozambique, saw groups linked to illegal ruby mining invade MRM’s primary residential facilities and the nearby village of Namanhumbir. The colored gemstones miner reported that more than 200 individuals participated in the unrest, causing extensive damage, including setting fire to external structures built by MRM.
Additionally, the vocational training center in the neighboring village of Wikupuri, developed by MRM in partnership with Mozambique's Institute for Vocational Training and Labor Studies, was looted and vandalized twice during the period.
Gemfields responded by temporarily relocating personnel to safer offsite locations and halting operations at MRM from 24 December 2024. A phased return to operations began on 26 December, with plans to resume full production before the end of the year.
Mozambique’s Civil Unrest and Broader Implications
The disruption at Montepuez Ruby Mining occurs against a backdrop of widespread civil unrest in Mozambique following allegations of election rigging favoring the ruling Frelimo party. The political instability has further exacerbated tensions in regions already challenged by illegal mining activities.
Kenmare Resources plc (LSE:KMR), which operates the Moma titanium mine in northern Mozambique, acknowledged the widespread disruptions but reported no material incidents at its site. Kenmare noted that it exceeded its minimum production targets for 2024 and continues to monitor the situation daily.
Gemfields’ Response and Path Forward
Gemfields has expressed its intention to restore normal operations at MRM swiftly while prioritizing the safety of its workforce. The company’s temporary relocation of personnel and its phased return plan underscore its commitment to maintaining operational stability despite the challenges.
The company also highlighted the need for enhanced security measures and continued cooperation with Mozambican authorities to address the risks posed by illegal mining and political unrest.
Conclusion
The suspension of operations at Montepuez Ruby Mining underscores the challenges faced by Gemfields and other resource companies operating in politically and socially volatile regions. As Gemfields navigates these disruptions, the broader industry will be watching closely to assess the impact on Mozambique’s mining sector and its ability to support long-term stability and growth.
