MINING had stopped at Gemfields’ 75%-owned Montepuez mine in Mozambique following an attack on a neighbouring property thought to be perpetrated by insurgents.
The ruby and emerald miner announced earlier this month that it was closely monitoring an increase in security events which had been closer to the mine than previously.
It said today Gemrock, which is situated about 12km south-east of Montepuez, had been attacked. Details of the event were being “verified” it said.
“As a consequence, MRM (Montepuez Ruby Mine) has initiated the process of evacuating operational employees and contractors, and therefore mining operations at the site have ceased,” it said.
Security personnel and Mozambique police force remain on site and Mozambique military are arriving on site.
“Gemfields and MRM hold the health and safety of their employees and contractors as their highest priority and remain in regular contact with government authorities. We will keep the market updated of further developments,” it said.
Shares in the company fell about 6.8% in Johannesburg trade.
The evacuation and production halt at Montepuez sours the mood at Gemfields which has rebounded impressively from Covid-19 lockdowns in 2020/21 that almost sent the company into bankruptcy.
Last month, it announced a $15m interim dividend following “sparkling” results which CEO Sean Gilbertson colourfully remarked were akin to pulling “a very well-groomed bunny out of the hat”. It also announced it would seek shareholder approval in the fourth quarter of this calendar year for a $10m buy-back of its shares, which had gained 14% in the previous 12 months.
In March last year about 60,000 people fleeing jihadist attacks in Cabo Delgado province of Mozambique turned up in the vicinity of MRM. The coastal gas town of Palma, about 150km from MRM’s Montepuez mine, had been overwhelmed by jihadist renegades.
In June attacks occurred near Ancuabe, also in Cabo Delgado, but some 65 kilometres “east-north-east” of MRM, said Gemfields. “As such, these attacks are considerably closer to the operations of Montepuez Ruby Mining Limitada,” it said in a statement to the JSE at that time.