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Gemfields on alert as insurgent attacks creep closer to Montepuez

Montepuez is an open-pit mine, considered the world’s most lucrative ruby operation. (Image courtesy of Gemfields.)

Africa-focused Gemfields (LON: GEM) (JSE: GML) warned on Wednesday that insurgents attacks are edging closer to its ruby mine in Mozambique’s northern Cabo Delgado province but said operations had not been halted.

An Islamic State-linked insurgency broke out in October 2017 in Cabo Delgado, a coastal province rich in natural gas reserves and host to an estimated $60 billion worth of international investment in gas projects.

The violence has so far left at least 3,100 dead, according to the Armed Conflict Location & Event Data Project (ACLED), which tracks political violence around much of the world.

Conflict there also has displaced nearly 856,000 people, nearly half of them children, according to UNICEF.

Gemfields said the latest attack hit the Muaja village, which is about 30km by road from its Montepuez ruby mine. A previous incident last month occurred about 65km east-north-east from the operation, in which the company holds a 75% interest.

“A large number of people are reportedly relocating to Nanhupo and Namanhumbir, where the mining operations are located,” Sean Gilbertson, CEO of Gemfields, said in the statement. “Given recent developments and the associated security review, operations continue with increased vigilance,” he added.

Violence has also affected other miners in the region recently. In June, Australia’s Triton Minerals (ASX: TON) reported an attack on its Ancuabe graphite project site. Syrah Resources (ASX: SYR) briefly suspended logistics and staff movement at its flagship Balama graphite operation due to assaults close to its primary transport route.

Montepuez Ruby Mining Limitada (MRM) produced 83,990 carats of premium rubies in 2021 and has generated $827.1 million in sales since 2014.

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