Gemfields (LON: GEM) (JSE: GML) has temporarily suspended ruby mining operations in Mozambique following violent incidents that resulted in two deaths.

On Christmas Eve, more than 200 individuals linked to illegal ruby mining attempted to invade the residential village adjacent to Gemfields’ Montepuez Ruby Mining (MRM) operation in northern Mozambique. The groups reportedly set fire to community buildings constructed by MRM and tried to breach the site amid widespread civil unrest triggered by the country’s disputed national election.

Security forces comprising Mozambican police and military responded with a “staged escalation of force,” leading to two fatalities, the company said.

In a related incident, a vocational training center in the nearby village of Wikupuri, built by MRM and managed by Mozambique’s Institute for Vocational Training and Labor Studies, was looted and damaged on the same day.

To prioritize safety, Gemfields temporarily relocated some of its more than 500 employees to off-site locations due to the heightened risk. A phased return of staff began on Thursday, the company confirmed.

Contested elections

The unrest follows Mozambique’s top court’s confirmation of the long-ruling Frelimo party’s election victory, which has been contested by opposition groups citing electoral fraud. Civil society monitoring group Plataforma Decide reports that at least 130 people have died in clashes with police since the election.

Frelimo has consistently denied allegations of vote-rigging, while the electoral commission has not commented on claims of fraud.

The violence has also impacted other foreign miners operating in the country, including South32.

The Montepuez ruby mine is considered the world’s most lucrative ruby operation.

MRM, 75% owned by Gemfields, employs approximately 1,400 people, according to the company’s website.

Shares of Gemfields rose 5.6% by 2:00 p.m. GMT. The miner has a market capitalization of £$84 million ($106 million).

Source: MINING.COM – Read More