In September 2014, Gemfields entered into a joint venture with East West Gem Investments Limited (‘EWGI’), a Jersey registered company, in order to progress opportunities in the Sri Lankan sapphire and gemstone sector via three Sri Lankan subsidiaries which will be 75% and 25% held by Gemfields and EWGI respectively.
Under the terms of the agreements, Gemfields has acquired 75% operating interests in sixteen exploration licences (covering diverse minerals) for a consideration of USD 0.4 million. The Sri Lankan joint venture seeks to deploy Gemfields’ proven exploration and gemstone experience with a view to replicating the successes achieved in Zambia and Mozambique, where Gemfields’ approach has brought considerable benefits for both the local population and the regional economy.
The joint venture will also see Gemfields and EWGI establish a gemstone trading company called Ratnapura Lanka Gemstones (Pvt) Ltd, a company approved by the Board of Investment of Sri Lanka (BOI Sri Lanka). The trading company will focus on sourcing rough sapphires from various sources in the local market.
It is intended that Gemfields’ proprietary gemstone grading systems and marketing methodologies will be applied in order to offer the gems to international buyers via Gemfields’ proven rough gemstone auction platforms, thereby adding value to Sri Lankan gemstone production, growing the sector and contributing to economic development.
The joint venture agreements seek to develop the broader exploration, mining and sorting infrastructure in Sri Lanka in order to promote a sustainable, transparent and globally competitive gemstone sector.