Gemfields’ 75%-owned Montepuez Ruby Mining Limitada (MRM) has entered into a legally binding contract with Consulmet Limited to construct an additional processing plant at MRM’s ruby mine in Mozambique.
The addition of the second plant will triple MRM’s processing capacity from the existing 200 t/h to 600 t/h, allowing MRM to process its sizeable stockpile, bring to market additional size and colour variations of rubies and to assess and expand into additional mining areas, Gemfields says.
The contract is a lump-sum turnkey contract based on industry standard International Federation of Consulting Engineers terms, with MRM’s payment obligations agreed in South African rands and equating to approximately $70 million (at recent foreign exchange rates and excluding VAT and government levies).
Subject to specified milestones, it is estimated 30% of this cost will fall in 2023 and 60% in 2024, with the remainder being paid in 2025. In addition, MRM expects a modest expansion of its mining fleet through 2025, with notable additional capacity being added in 2026.
The new processing plant, funded by cash resources and debt, is expected to become operational during the first half of 2025.
The Montepuez mine provides more than half of the world’s supply of quality rubies, delivering over $100 million in tax revenue to the government, and over 1% of revenue allocated to establishing community and conservation projects, according to Gemfields.