This content was first published on IGR – Italian Gemological Review no. 5 in 2018. The information provided here is therefore current as of the original publication date.
“I’m not creating a new Gemfields. I’m not the world’s best and I’m not calling myself the De Beers of coloured stones. Our vision is very clear, we are building an employee-friendly, sustainable development, and community-centred business”. This is how Dev Shetty, Fura Gems Inc. CEO introduces himself to the Mining Journal. Fura Gems is the new player in the extraction sector of rubies and emeralds with its headquarters in Toronto, Administrative seat in Dubai and operation sites in Colombia and Mozambique. In the South American country, Fura Gems owns 76% of the historical emerald mines of Coscuez, while in Africa it has already managed since November 2017, 80% of four permits for the exploitation of rubies that increasingly represent most of the world offer. Then, on 16th July 2018 the big shot, with the announcement of the 15 million Australian dollar merger with Mustang and Regius, two Australian companies already present in Mozambique. Thanks to this operation Fura Gems becomes the most important extraction Group of rubies in the Cabo Delgado area with a permit covering a 1104 square kilometre territory. Such acquisition allows to gather competences, strengthen the presence and launch an ambitious investment plan worth 25 million Canadian dollars.
Is such a statement an open challenge to Gemfields, the most structured extraction group of precious material for jewellery? May be there are some reasons to believe it. Before taking over Fura Gems, Dev Shetty had managed Gemfields operations in Zambia, Mozambique and then Colombia in 2014. He is a manager characterised by a remarkable knowledge and a technical know how, grown up in the South African Group listed at the Stock Exchange in London. Among the first moves, he entered precisely where Gemfields was retreating by acquiring the rights for Colombian emeralds after Gemfields left Coscuez and Sri Lanka as its new company management had decided, imposing a change in the top management and the divesture of all those activities that were not immediately profitable. Dev Shetty gladly relates with his former company in his statements. He makes no mystery of what he considers Gemfields big problem, that is the overwhelming predominance of a single shareholder, Pallinghurst, who owns 77% of shares. The assault by Fura Gems is not launched in a period of utter peace. In 2018 Gemfields had to defend itself from an increasing chorus of accusations for alleged abuses against artisan miners that ended with a lawsuit. Shetty knows these traps well; he was in Mozambique as Gemfields manager when the events took place and he certainly doesn’t want to be in the same empasse again on the front of ethical lawfulness now that he is leading a competing Group. The lesson taught Fura Gems to start a study in order to assess the impact of their Colombian plant on quaqueros, small local artisan miners, famous for being involved in violent episodes for the control of emeralds until the ‘90s. The launch at the end of 2018 of the industrial extraction in Coscuez will definitely cause a certain discontent. In fact, modern methods generate little debris, a traditional resource for the recovery of gems to swell the profits of small miners.
Also in Mozambique Fura Gems, like Gemfields, will have to pass the test of responsible extraction. The ambiguities in the use of force against the local communities, together with the progressive widening of concessions to the detriment of small mining artisans, represent an important test. The market, though, gives the new mining company some reasons to be optimistic. Gemfields auctions have obtained remarkable results for years, with a record of 72 million US dollars obtained in Singapore in June 2018. Fura Gems could contribute to the widening of the offer when between the end of 2018 and the first half of 2019 it will start to offer in its auctions batches of rough emeralds and rubies. Shetty, who has already announced a marketing plan and entrusted Thompson with the communication, will be obliged, also in this case, to follow the steps of its main competitor and create a recognisable brand. To quote the words of this dynamic CEO, his communication will be based on the promotion of products on a general level, that is rubies and emeralds, a bit like the old De Beers approach with diamonds. However, as such a scenario would mainly favour Gemfields, some observers expect that the characteristic features of Colombian emeralds are evidenced when compared to those coming from Zambia and marketed by Gemfields. Also because among the set objectives of communication we find the need to free the negative image of Colombian emeralds and their bad reputation that make them still be considered by the public at large as an instrument in the hands of criminal organisations and narco-traffickers.
Towards duopoly? Fura Gems CEO thinks that the total volume of the transactions involving emeralds, rubies and sapphires could soon increase from 2 to 5 billion US dollars anticipating a share equal to 20/25% for Gemfields and at least 10% for his own Group.
Gem News published on IGR – Italian Gemological Review #5, Autumn 2018
