Sapphire prices under pressure from Madagascar influx – Richland
1ST NOVEMBER 2017
BY: MARIAAN WEBB
CREAMER MEDIA SENIOR RESEARCHER AND DEPUTY EDITOR ONLINE
JOHANNESBURG (miningweekly.com) – An influx of gemstones from Madagascar is putting the price of sapphire under pressure, prompting Australian producer Richland Resources to shift its sales strategy.
The London-listed company, which operates the Capricorn mine in Queensland, has transitioned towards larger-scale, more strategic sales events, rather than selling smaller parcels of gemstones on a monthly basis to leverage pricing against the irregular influx of uncertified stones.
Citing the Gemological Institute of America, Richland CEO Bernard Olivier said on Wednesday that an estimated 50 000 unlicensed, illegal, small-scale miners were operating in an environmentally protected area of Madagascar.
He said consumers, however, were becoming increasingly selective regarding the origin and ethical nature of products.
“Each Capricorn sapphire gemstone ensures quality, environmental best practice under Queensland and Australian mining law and both safe and ethical operational practices.”
The first new larger sales event will be held early this month. Richland has stockpiled production, a decision which has affected its operational profitability in the third quarter. Total revenue generated in the September quarter amounted to $354 000, comprising sapphire sales of $245 000 from the sale of 103 372 ct at an average price of $2.38/ct, and $109 000 received from various Australian government tax rebates and incentive schemes.
The Capricorn mine produced 1.06-million carats in the third quarter, missing its production target of 1.2-million carats. The shortfall was mainly owing to a rehabilitation of mine disturbance ahead of the upcoming wet season in central Queensland.