Gemfields and the ruby revolution in Mozambique

We visit the Montepuez Ruby Mine in Mozambique, the world's largest deposit of the highly coveted coloured gemstones, which is being powered by the ethical mining group Gemfields.

Mozambican rubies in the rough. Courtesy Gemfields

In the Maninge Nice pit, the ground is literally littered with rubies. They sit in among the dirt, throwing up glints of red and pink. We play a somewhat novel game – who can collect the most stones in the space of a few minutes – but it’s too easy. I get to a handful before becoming steadily distracted by the magnitude of it all.

I am with a group of journalists in Mozambique’s northeastern Cabo Delgado Province, at the Montepuez Ruby Mine. Lauded as the most significant ruby-deposit discovery of recent times, about 50 per cent of the world’s ruby supply now comes from this mine. “Montepuez Ruby Mine covers over 33,000 hectares, making it the world’s largest ruby deposit,” explains Rupak Sen, director of marketing and sales, Asia and Middle East, for Gemfields, which owns a 75 per cent stake in the mine. “Although the deposit was only discovered in 2009, the rubies at the Gemfields Montepuez deposit have been established as approximately 500 million years old.”

To boot, some of the rubies found here are of a quality previously only thought possible in gemstones from Myanmar. “They are comparable with the legendary ‘pigeon blood’ rubies of Myanmar, which frequently command the highest price per carat of any coloured gemstone,” says Sen.

Getting to the mine is no easy task, of course. There are flights from Dubai to Tanzania and then onto Pemba, on Mozambique’s northern coast – where a tiny airport and convoluted entry process highlight the area’s limited number of tourist arrivals – and then a lengthy drive that takes us through acres of untamed land, past abandoned colonial-era buildings and villages made of mud huts.

The following morning brings expansive horizons and clear, uninterrupted blue skies – the kind that seem specific to Africa – along with a tour of the Montepuez Ruby Mine. It’s a revelation. The mining industry has a notoriously bad reputation, but here we are greeted with signs such as: “Stop, think, act” and “Safety awareness saves lives”, highlighting Gemfields’ aim of operating a zero-accident mine.

Every employee we see is appropriately dressed and equipped; and there is only minimal visible damage to the landscape, courtesy of Gemfields’ practice of filling in old pits as mining teams move along, replanting local plant species to bring verdant cover back to the land. We contribute to this process during our stay, with each member of the group planting a tree as a marker of our time spent here.

Rubies were first discovered in Montepuez in 2009. As the story goes, a man working the land, which was formerly a hunting concession, happened across one of the red stones. Given the volume of rubies that we see during our trip, it seems incredible not that they were discovered, but that they managed to remain hidden for so long. The local owners of the land contacted Gemfields; they had heard about the success of the company’s ethically operated emerald mine in Zambia and wanted to replicate the model in Mozambique. Gemfields acquired a 75 per cent stake in the mine and arrived on-site in 2012.

The team remembers trying to decide where to place their camp. They picked a spot, started digging a hole for the latrine and promptly unearthed handfuls of rubies. The jokingly dubbed “million-dollar toilet” stayed, and is now flanked by the Sort House, but the camp was moved farther away.

The sheer number of rubies here makes the mining process relatively straightforward. This is open-pit mining – in simple terms, mountains of rich red earth are scooped up in enormous diggers, transported to the wash plant and processed. The rubies are then picked out from the resultant gravel by hand.

Mining may be a controversial business, but there’s magic in it, too. There is something indescribable about picking up a ruby and knowing that it has sat under the Earth’s surface for hundreds of millions of years – that you are the first person to ever touch it.

While diamonds have dominated the market for the best part of the past century, rubies have been coveted by certain cultures throughout the ages. “Rubies were treasured by early cultures as they represented the redness of the blood that flowed through their veins, and many believed that rubies held the power of life and so were often carried into battle for protection,” says Sen. “In fact, the ruby has always been highly esteemed in Oriental countries, being regarded as endowed with extraordinary powers. As western empires rose to power, rubies became the favoured gemstones of European royalty and aristocracy.

“However, the advent of feisty diamond marketing, backed by consistent supply, in the past three or four decades, took coloured gemstones to the background, while diamonds took centre stage. This is now changing, with leading jewellery brands like Chopard, Bvlgari, Cartier et al launching exclusive coloured-gemstone collections, and with increasing incidence of ruby and emerald jewellery being sported by celebrities around the world.”

If the tide is turning, Gemfields must be given its dues. It can now offer a consistent supply of rubies to manufacturers and polishers, with the promise that they have been ethically sourced and are of a guaranteed quality. Much as it did with emeralds in Zambia, the company has also created the first official classification system for rubies, which in addition to the standard four Cs (colour, clarity, cut and carat) that will be familiar to any diamond buyer, includes two other Cs: certification and character.

Beyond logistics, Gemfields’ global marketing campaigns are contributing to creating an aura of covetability around coloured gemstones once again. Its latest marketing campaign, Ruby-Inspired Stories, offers a triptych of films that explore three properties that rubies have long been associated with: passion, prosperity and protection.

In fact, unbeknownst to many, rubies are much rarer than other precious stones. At present, the world ruby supply consists of about three million cut and polished carats per year, compared to about five to eight million for emeralds and 50 million for diamonds, according to Ian Harebottle, chief executive of Gemfields.

But the company’s aim is not for coloured gemstones to overtake or replace diamonds in the public consciousness, but to create more balance and choice in the market. “The decade starting 2015 was actually billed as the decade of the coloured gemstone,” says Sen, when asked whether he envisages a time when coloured gemstones will surpass diamonds in popularity. “Every time a consumer buys a coloured gemstone, diamonds are sold alongside. Coloured gemstones and diamonds complement each other, and that’s the way it will always be,” he says.

Gemfields held its first ruby auction in Singapore in June 2014, and generated US$33.5 million (Dh123m). At its latest ruby auction in June, the company generated record revenues of $44.3m (Dh162.7m), with an average realised price of $29.21 (Dh107) per carat.

There is much talk during our time in Mozambique about the "1 per cent". Not the 1 per cent, that top layer of society that holds a disproportionate share of global wealth (although that is an unfortunate parallel) – but the 1 per cent of Gemfields' annual revenue that it donates to CSR initiatives. The number feels small to me – as small as it can be, almost.

I put this point to Harebottle. “Our commitment is a minimum of 1 per cent,” he says. “We are working with a luxury good in unstable economies. We are very fortunate that through our efforts we are constantly growing, but there are no guarantees. When I make a commitment, I have, to the very best of my ability, barring any major catastrophes, to be sure that I am able to keep that commitment.”

The point, of course, is that whether you are talking about 1 per cent or 100 per cent, sustainability needs to be sustainable, or else it is entirely counterproductive. “When people ask me about our investment in sustainability, I say: ‘The one thing I can tell you is it doesn’t mean we are perfect and it doesn’t mean we are doing enough.’ I’ve lived in Africa and I know there is not a company or individual in the world that can do enough, because the needs are so great.

“The one thing I do know, 100 per cent, is that the areas we are in are better for us being there. We’re doing the best we can, recognising it’s not enough and constantly trying to do better.”

And I am reminded on numerous occasions how even one per cent can make a major difference in a place like Mozambique. We visit some of the projects that the company is investing in – they are very real grass-roots initiatives. “After collaboration with the local community, a farming association was recently formed producing beans, okra and various other vegetables. Currently, most of the produce is being bought back by the company, where it is purchased at market prices and used for the sustenance of its own employees,” Sen explains. “A poultry-farming cooperative has been formed at a nearby village with a view to further empower women in the area. Going forward, initiatives based around education (including a new skills and development centre), health care and the provision of clean drinking water will also be put in place. Conservation is also a focus.”

Beyond this, by implementing a professional, transparent, legal mining process, Gemfields is taking the trade of Mozambican rubies out of the hands of illegal syndicates, which exploit poverty-stricken members of the community, by driving them to partake in hazardous and illegal mining work, and paying them a fraction of the gemstones’ true worth. Illegally mined rubies are then smuggled out of the country. Gemfields, on the other hand, will argue that it is able to achieve the best prices for the stones, and pays taxes and royalties to the Mozambique government (MRM is responsible for about 20 per cent of the corporate tax in the Cabo Delgado Province), while also creating employment and job security for members of the local community.

In a perfect world, Gemfields would not be an anomaly. Its ethical approach to mining would be the industry norm. But we do not live in a perfect world, so Gemfields must be lauded for its efforts. It is the only supplier of coloured gemstones that has built a holistic business model that places importance on people and the planet, as well as profit. It is introducing transparency in an industry where, traditionally, there has been none.

For the first time, you can buy a ruby and know exactly where it has come from, and that it was mined in a way that is respectful of local populations. And in this imperfect world, that’s basically priceless.

Read this and more stories in Luxury magazine, out with The National on Thursday, November 3.