LONDON (Alliance News) - Gemfields PLC Monday said it has entered into a joint venture with Jersey-registered East West Gem Investments Ltd in order to target opportunities in the Sri Lankan sapphire and gemstone sector.
In a statement, Gemfields said the joint venture will target the opportunities through three Sri Lankan subsidiaries, in which it will hold a 75% stake. East West Gem Investments will hold the remaining 25% interest.
Under the terms of the agreement, Gemfields paid USD400,000 for its 75% stake, which gives it operating interest in sixteen exploration licences.
The joint venture will also see Gemfields and EWGI establish a gemstone trading company called Ratnapura Lanka Gemstones (Pvt) Ltd. The trading company will focus on sourcing rough sapphires from various sources in the local market, according to Gemfields.
The intention is to offer the gems to international buyers through Gemfields' rough gemstone auction platforms, according to the statement.
"We are delighted to announce our entry into what we consider to be the third of the 'big three' coloured gemstones. With revenue-producing emerald and ruby operations in Zambia and Mozambique already in the Gemfields portfolio, the proposed development of sapphire operations in Sri Lanka will realise our stated red, blue and green 'traffic light' of coloured gemstones strategy," Chief Executive Ian Harebottle said in a statement.
"We are excited about the possibility of being able to offer a reliable supply of well-graded sapphires to customers attending our auctions, and to ensuring that all gemstone stakeholders in Sri Lanka - including its government and general population - benefit from the value-addition and transparency that the Gemfields approach has already delivered in Zambia and Mozambique," the CEO added.
Gemfields shares were Monday quoted down 0.7% at 48.65 pence.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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Gemfields Grou. (GEM)