LONDON (ShareCast) - (Sharecast News) - London-listed Gemfields Group said on Friday that a second plant at its Mozambique mine was on track to start producing rubies later this summer, despite delays.
In a brief market update, the AIM miner - a specialist in coloured gemstones - said construction of a second processing plant at the Montepuez ruby mine (MRM) was 95% complete and "materially" on budget.

The plant is expected to triple the mine's ore processing capacity and will see the first rubies produced in August.

Its completion - including the tailings belt conveyor and decanter centrifuge - is expected to occur the following month.

Gemfields said final completion had been delayed due to difficulties in obtaining work permits, security issues and transport difficulties, including a key transformer being damaged during transit.

Last year saw widespread civil unrest in Mozambique over claims the presidential elections were rigged, causing logistics and supply chain issues.

Gemfields said: "The group wishes to commend the sterling efforts of both the MRM team and the principal contractor in positively navigating the very challenging circumstances experienced in the north of Mozambique during the 22 months since the project was first announced."

Away from MRM, Gemfields confirmed that its Kagem emerald mine in Zambia had resumed focused mining.

A measured further expansion of operations was due to get underway next month, it added, although a return to full-scale mining remained unlikely "for some months".

Gemfields temporarily shuttered the Kagem mine last year due to an oversupply of Zambian emeralds and a weaker luxury market.

The company holds controlling interests in a number of mines and licences in Africa, but MRM and Kagem - along with Faberge - are its core assets.

The group is currently exploring strategic options for the luxury jewellery brand, which it acquired over a decade ago, including a potential sale.

As at 1130 BST, shares in Gemfields were up 2% at 4.5p.

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