COLOMBO (EconomyNext) – Gemfields Plc, an international gem mining and jewelry firm, has said it is going ahead with exploration for sapphires in Sri Lanka despite new government controls to prevent gemming by foreign firms.
The firm, which produces about a fifth of the world’s rough emeralds and is listed on the London Stock Exchange, had earlier acquired 16 exploration licences.
"Gemfields is in the process of establishing initial infrastructure in Sri Lanka and initiating preliminary geological assessments in areas of interest in order to progress opportunities in the Sri Lankan sapphire and gemstone sector," the company said.
"Placement of key management is in progress," the London stock exchange filing said.
Gemfields has mines in Zambia and Mozambique and in September 2014 said it bought 75 percent operating interests in 16 exploration licences in Sri Lanka "covering diverse minerals".
But Sri Lanka’s new president, Maithripala Sirisena last month announced the government had cancelled 16 mining licences issued by the previous government and the National Gem & Jewellery Authority (NGJA) said it will not allow mechanized mining by foreign firms.
NGJA officials were not immediately available for comment.
The government move came after protests from the local gem trade which feared mechanized mining by foreign firms would exhaust the deposits and also lead to greater control of the market by Gemfields.
Gemfields said in its quarterly update that its emerald and beryl production nearly tripled in the third quarter, driven by increased average grades at its 75-percent-owned Kagem mine in Zambia.
The miner said it produced 9.9 million carats of emerald and beryl in the quarter ended March 31, compared with 3.6 million carats a year earlier.
Production of ruby and corundum from the Montepuez mine in Mozambique rose slightly to about 1.4 million carats in the third quarter from 1.1 million carats a year earlier.