Gemfields Navigates Operational Setbacks at Montepuez and Kagem Mines as It Focuses on Recovery in 2026
Gemfields Reports Production and Cash Flow Pressures from Mine Disruptions in Mozambique and Zambia, Targets Operational Stability in 2026
Amid a challenging operating environment, gemstone producer Gemfields has reported that operational disruptions at its key mining assets weighed on production and cash generation for the financial year ended December 31.
The company cited interruptions at its 75%-owned Montepuez Ruby Mining (MRM) operation in Mozambique and at the Kagem emerald mine in Zambia as major factors affecting performance.
In a trading update, Chief Executive Officer Sean Gilbertson explained that delays in completing the second processing plant (PP2) at Montepuez, combined with elevated levels of illegal mining activity and fluctuations in ore grades, constrained the production of premium-quality rubies.
These challenges also disrupted the company’s auction schedule, a critical component of its revenue model.
Although the PP2 facility has been producing rubies since September 2025, final commissioning has taken longer than anticipated and is now expected to extend well into the first half of 2026.
The delay has limited the operation’s ability to reach full production capacity and stabilise output levels.
Gemfields also reported mixed auction performance during the year. The company conducted seven gemstone auctions, generating total revenues of approximately $129 million, with demand proving uneven across product categories.
Market conditions showed stronger interest in higher-quality gemstones, while lower-grade and smaller-size stones faced weaker demand.
Despite these challenges, the company noted encouraging price improvements for premium emeralds and rubies toward the end of the reporting period.
Cash generation remained under pressure throughout the year, even as the company maintained disciplined cost management and strong safety performance across its operations.
External factors have also contributed to uncertainty, including geopolitical tensions in the Middle East, which have introduced volatility into global energy markets.
While diesel prices remain unpredictable, Gemfields indicated that it is still too early to quantify the potential cost implications for its mining operations.
Looking ahead, the company has outlined clear operational priorities for 2026. These include stabilising production at both mines, methodically ramping up the PP2 plant to its full design capacity, maintaining strict cost and capital discipline, and restoring a consistent and predictable auction schedule.
Strengthening the balance sheet remains a central objective, with debt reduction identified as a near-term focus to improve financial flexibility and support future investment decisions.
Gemfields expects to release its full financial results for the year ended December 31 on March 26.
The company anticipates reporting a significant improvement in financial performance, with its loss per share expected to narrow by approximately 69% year-on-year to around $0.03, while headline loss per share is projected to decrease by about 44.8% to roughly $0.01.
The weighted average number of shares in issue during the period was approximately 1.48 billion.
