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Gemfields Owner Reduces Staff, Salaries

Dec 14, 2017 4:30 AM   By Rapaport News
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RAPAPORT... Colored-gemstone producer Gemfields is taking measures to reduce debt and revive profit growth, following its acquisition by Pallinghurst Resources earlier this year.

Gemfields’ debt grew almost fivefold to about $84 million between 2014 and July 2017 when Pallinghurst acquired the colored-gemstone producer, the parent company explained in a statement. To improve efficiency, Pallinghurst and Gemfields have reduced staff numbers at the administrative head office by about 15%, and implemented “staff rationalization” at the New York and India bases.

The company moved its New York marketing function to London in September as part of attempts to restructure and streamline operations, resulting in a small number of layoffs.

Pallinghurst has made changes to its senior leadership and their remuneration, enabling a 50% reduction in total compensation to the executive management team, it explained. The company has also reorganized certain structures at Gemfields, with employees now reporting to an executive based in the same country rather than someone elsewhere in the same discipline.

Aiming to lift sales value, Gemfields has shifted focus to extracting “premium” emeralds at its Kagem mine in Zambia. Revenue slumped by $54 million in the fiscal year ending June 2017 due to a drop in recovery of these high-end stones, Pallinghurst noted.

“Whilst it is too early yet to make firm forecasts, the initial results have been very positive, with strongly improved premium production in the last three months, particularly in November,” the group said.

The company has also started the reopening process for the Mbuva-Chibolele mining pit, located near the Kagem deposit. It expects to achieve initial production of goods from that area in the first quarter of 2018.
Tags: colored gemstones, Gemfields, gemstones, Rapaport News
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