Gemfields Takes $125.2 Million Impairment on Montepuez Ruby Mine
Gemfields Records US$125.2 Million Montepuez Impairment After Lower Ruby Grades
Gemfields expected to report a net loss of US$73.5 million for the six months ended June 30, 2026, after recording a US$125.2 million non-cash impairment on its Montepuez Ruby Mining (MRM) operation in Mozambique.
The impairment followed lower-than-expected recoveries of premium-grade rubies at Montepuez, prompting the company to adopt a more conservative outlook for future grade recoveries.
Gemfields said recent recoveries had shown early signs of improvement, but further production data was needed before drawing firm conclusions.
The company also restated its 2025 financial-year impairment from US$35 million to US$65 million after identifying an additional US$30 million adjustment. Further details were expected in its interim financial statements.
MRM generated US$76.1 million in revenue during the first half of 2026, up from US$38.9 million in the same period of 2025.
However, the comparison was affected by the postponement of a ruby auction from December 2025 to February 2026.
Gemfields said its second processing plant, PP2, had reached and at times exceeded its designed processing capacity, although final commissioning and optimisation were still underway.
The facility was intended to increase processing capacity and improve the mine’s ability to process stockpiled material and ore from different areas of the concession.
Montepuez had also faced operational challenges, including heavy rainfall, commissioning issues at PP2, security-related disruptions and illegal mining activity.
Earlier company updates said these factors, together with declining grades, were expected to affect production, product quality and cash flow.
Gemfields’ Kagem emerald mine in Zambia delivered stronger operational performance during the period, generating US$26.7 million in revenue compared with US$21.1 million a year earlier. The company reported good-quality emerald recoveries, although operating costs remained elevated.
The company has been working to strengthen its balance sheet following a difficult period. It raised US$30 million through a rights issue and agreed to sell its Fabergé jewellery business for US$50 million, while management continued to prioritise debt reduction.
Interim CEO David Lovett said the focus for the remainder of 2026 was to determine whether the recent improvement in ruby recoveries at Montepuez could be sustained while maintaining financial discipline.
