Production at new ruby mine in Mozambique expected to start before the end of 2012
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  Production at new ruby mine in Mozambique expected to start before the end of 2012

August 10, 2012

Officials of the Montepuez Ruby Mining company have reportedly informed the Mozambique Ministry of Mineral Resources that production of gemstones from its concession in the Cabo Delgado Province in the north of country will begin in late November or early December. The concession covers an area of 34,000 hectares, and is believed by some to represent the most significant ruby discovery in recent years.

Speaking to the local press, a company official said that production had already been scheduled to begin, but it had been delayed due to the late arrival of equipment.

The mine is expected to strongly boost the role of the gemstone sector in the Mozambique economy. Montepuez currently employs about 200 workers, but the number is expected to rise to 500 when full production is reached.

In February, the British company Gemfields acquired a controlling stake in the concession from Mwiriti Limitada, a locally owned company. Under the terms of the agreement, the concession licenses would be held by the new company, Montepuez Ruby Mining Limitada. The licences are valid for 25 years.

Gemfields currently owns 75 percent of Montepuez, with Mwiriti Limitada holding the remaining shares. The company has already invested $5 million in the ruby mining project, and this is expected to increase to $25 million over the next five years.

As it waits for production to begin, Montepuez has been struggling to curtail an invasion into its concession area by artisanal miners. According to local media, there already have been repeated clashes between the illegal miners and a force of company guards and police.

The most serious incident occurred on July 7, when guards opened fire on a group of some 300 artisanal miners, killing one and wounding two. Radio Mozambique later reported that incident was sparked off by a witchdoctor from the neighboring province of Nampula, who convinced the artisanal miners that he was able to "vaccinate" them against bullets.