The leading firm in the world in the chain of production and sale of precious stones entered the country with a very clear vision of what they want to do. The company’s global head of operations explains it.
When Gemfields announced their arrival in Colombia, even the Minister of Mines and Energy applauded the news. In a press release, the head of the portfolio, Tomás González, said: “This shows that Colombia is an attractive country for the international mining industry due to the variety of minerals that we offer to the world.”
The business, in financial terms, does not enter the list of the largest that have been made in Colombia this year. It involves the acquisition of 70 percent of an emerald mining license in the Coscuez area, in San Pablo de Borbur (Boyacá) and 70 and 75 percent of the licenses of two companies that have applications and concession contracts in procedure before the National Mining Agency, both totaled $ 22.5 million.
However, it is a significant business because it is the second world-class company and the first listed in London to come to work in the emerald sector in the country. The company’s global head of operations, Dev Shetty, spoke exclusively and explained what the expectations of this new business are.
How is business in Colombia?
Our interest in Colombia is not something recent, we began to look at the country in 2008, unfortunately with the recession we had to redo the investment strategy and we decided to go back in business. We came back in 2013, looking at different operations and we came back because Colombia is a country that has a longstanding industry, and has the best of the best in emeralds. There are many opportunities.
What kind of opportunities?
Last year about 2 million carats of emeralds were produced, and this year to September they were around half a million carats, that is, the numbers are collapsing. We do not believe that this is because the emeralds have disappeared, the resource is still there, but it takes investment to discover the geology, develop the mines and in the community. Those are the three pillars and we are very proud to work on these three fronts.
What do you mean?
We do not see sustainability as a marketing strategy, we have a marketing division, a geology division and a sustainability division. These are the three strengths of the company. Our policy is to invest at least 1% of our net profit in social investments. What we want to do in Colombia is, first, understand the resource and the region, to take the emerald industry to another level.
We know that it will not be easy, we know that there will be challenges and everyone talks about it, and the complex story, but everyone has a story. In India and Africa there are also complex situations.
We have confidence in the country, we have spoken with the Ministry of Mines and Energy, with the National Mining Agency and they have invited us to come to contribute to the sector.
Is the Gemfields team already in Colombia?
Yes, part of the team that comes from abroad is here in Colombia. Only part of it, because in reality most of the people who will work on the project will come from the community. In particular for the Coscuez mine we will need to work with many people from the region who know the area. For us, employment must come from the community.
How many jobs can they create with these new projects?
We will know this very soon. We have to know the community to know what talents there are and what we need to build the talent that we will require. This will also depend on the geology, on the scale of the mine, but ultimately we are talking about hundreds of jobs. Also, something important is that in this sector when you create a job, you actually create ten, due to the productive chains, so if we talk about 100 jobs, there are actually a thousand.
Do you know at this point if you are going to develop an underground or open project?
It will have to be underground because in Colombia in that area it cannot be done under the open sky. There is another sector in which we have to do an exploration. Again, we still have to do, a lot of geological work, maps, exploratory drilling, chemistry, and this is not only going to help us, it is going to help the entire sector, because we are going to have more knowledge of the subsoil. This will require an investment of several million dollars. I think that job could last for the next 18 months before we go to the market with a business plan.
But one of the areas they bought is already producing, will they stop production to focus on exploring for 18 months?
The idea is more how to dedicate ourselves to organizing, to see by what means we work, at what scale we do it. This is a big investment, so we have to get it right from the get-go. We have good expectations with the Coscuez license, which is for an underground mine, but what type of technology is the most appropriate, is what we have to figure out.
But does that mean they won’t continue to produce at this mine?
We believe that while we explore we may find some gems, but this will not be our immediate priority, our plan is to identify what is the best technology, the best scale to work with.
What is the investment in the exploration phase?
It’s too early to tell, we have to first identify on what scale we need to explore. This will be a significant figure.
THERE IS A LOT TO EXPLORE
According to Gemfields’ director of operations for South America and Asia, geologist Kartikeya Parikshya, the company has good long-term prospects in Colombia because there are still areas with potential to find the gemstones that have not yet been explored.
The firm currently has emerald, ruby and sapphire production assets in Zambia and Mozambique, where they employ 1,542 people and report earnings of US $ 145 million a year.
The process of classification and sale of gems is organized by the same company, which is in charge of monitoring the seriousness of the buyers.