Gemfields has formed a joint venture with East West Gem Investments Limited (‘EWGI’), a Jersey registered company, to explore opportunities in the Sri Lankan sapphire and gemstone sector via three Sri Lankan subsidiaries. Gemfields will be a 75 percent stake holder in the subsidiaries, and 25 percent will be held by EWGI.

Ian Harebottle, CEO of Gemfields, commented: “We are delighted to announce our entry into what we consider to be the third of the ‘big three’ coloured gemstones.” He added that, in addition to Gemfield’s current emerald and ruby operations, “the proposed development of sapphire operations in Sri Lanka will realise our stated red, blue and green ‘traffic light’ of coloured gemstones strategy. Sri Lanka is already known as a key source of sapphires of all colours, and of the highly sought-after padparadscha sapphire. The favourable business climate and attractive incentives available via the Board of Investment of Sri Lanka provide a sound platform for our investment and evaluation of growth opportunities.” He further noted that, “We are excited about the possibility of being able to offer a reliable supply of well-graded sapphires to customers attending our auctions.”

Under the terms of the agreements, Gemfields has acquired 75 percent operating interests in sixteen exploration licences (covering diverse minerals) for a consideration of USD 0.4 million. The JV with EWGI will see apply Gemfields’ expertise of exploration and gemstones. Also, Gemfields and EWGI will establish a gemstone trading company called Ratnapura Lanka Gemstones (Pvt) Ltd, approved by the Board of Investment of Sri Lanka (BOI Sri Lanka), for sourcing rough sapphires from various sources in the local market.

Gemfields’ proprietary gemstone grading systems and marketing methodologies will be applied to offer the gems to international buyers via Gemfields’ rough gemstone auction platforms. This in turn is expected to boost the Sri Lankan gemstone production, add growth to the sector and economic development. The joint venture seeks to develop the broader exploration, mining and sorting infrastructure in Sri Lanka, and promote a sustainable, transparent and globally competitive gemstone sector.