Gemstone producer’s Zambian assets improve outputs

Africa-focused coloured gemstone producer Gemfields’ October investor update reports that despite a potential global economic downturn, the company’s increase in sales is sound evidence of the continuing demand for its products across all quality ranges.
Gemfields nonexecutive chairperson Graham Mascall says the improved operating efficiencies at the Kagem emerald mine, in Zambia, have contributed to these positive results.
The company implemented a multi- faceted approach, which included using improved technologies, a commitment to employee training and the adoption of a constant learning approach.
According to the Gemfields group financial results to June 30, operating costs averaged $204/t of ore, compared with the previous year’s figure of $193/t of ore.
Mascall explains that the positive results yielded at Kagem have motivated the company to shift its short-term focus from production outputs to implementing a strategic focus that will see the scale of operations at the mine increased.
In line with the proposed strategy, Gemfields has awarded a one-year renew- able contract to an external contractor to manage the waste removal component of an extended high-wall push-back project that is aimed at opening up areas for future production over the next three years.
Further, Gemfields has acquired drill rigs, excavators and dump trucks worth $4.7- million, increasing its significant cash commitment to improving the size and quality of the Kagem operating fleet.
As a result of improved operations and better returns, the group announced that it will reinitiate a number of geological and exploration projects that were put on hold in 2009.
Mascall says Gemfields will undertake new exploration projects owing to developments that took place during the past year. The exploration projects will be conducted under the existing Kagem and Kariba mining licences, as well as at other target areas within Zambia, Madagascar and other international provinces.
Meanwhile, he says the company’s production levels at its 50%-owned Kariba amethyst mine, in Zambia, are returning to historic volumes while demand for the product is improving.
Gemfields plans to increase the level of commitment and investment in the mine.
However, Mascall says this commitment will be subject to the resolution of increased ownership discussions with the Zambian government, which owns the remaining 50% of the mine.
Further, the group has admitted to ongoing challenges such as illegal mining activities within the Kagem licence area and theft. Gemfields says it is working in cooperation with all key Zambian Ministries in its efforts to implement an amicable and peaceful solution.
Security measures taken by the company will also assist in reducing theft of its assets. The miner says it is investigating the installation of X-ray body scanning units.
The company also announced that it had been upgraded from category C to category B in the Environmental Council of Zambia’s inspection for the renewal of statutory licences and the Environmental Protec- tion Funds’s annual environmental audit reports.
The group hosted a lower-quality emerald auction in March, which was attended by some 30 companies from Germany, India, Israel and the US, with 18.55-million carats on offer in 81 separate lots.
Gemfields reports that the sales from these auctions, as well as ones hosted in July and December last year, totalled $37-million, with 76 out of the 81 lots being sold.
The company aims to continue the successful sale of its gemstones, with a scheduled auction taking place during this month.