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Ruby Trade Generates $12M in Taxes for the State

Ruby Trade Generates $12M in Taxes for the State

The state collected around 12 million dollars (758.4 million meticals) in taxes from a ruby auction held by Montepuez Ruby Mining (MRM) in Thailand. In specific terms, the tax gains are distributed as 4.6 million dollars in Mining Production Tax and 7.4 million dollars from Value Added Tax.

According to a document quoted by Semanário Económico, the auction, which took place in Bangkok, saw the sale of 217,000 carats of rubies at an average price of 36.95 dollars per carat.

‘This event is particularly significant at a time when ruby production in the country is facing challenges, such as breakdowns in production equipment and military instability in the northern zone. The results show the economic potential of the gemstone industry in Mozambique,’ he emphasised.

Montepuez Ruby Mining recently announced that it plans to resume production by the end of the year, which has been interrupted since 24 December due to the post-election conflicts, according to the Lusa news agency.

According to the mining company’s statement, the issue is the deterioration of security conditions in the mine area, in Cabo Delgado, over the last week. On 24 December, ‘more than 200 people tried to invade’ the MRM village, destroying and setting fire to various structures.

In the escalation of violence, the intervention of the police and military personnel guaranteeing security led to the death of two citizens on the spot. Some of the 500 people working in the area were relocated to other places on 26 December for security reasons, two days after activities at the mine stopped.

‘MRM intends to return to normal operations before the end of the year,’ the company said in the same statement, recalling that the neighbouring village of Wikupuri, built by the mining company, was also attacked this week by alleged protesters, with looting and destruction.

Since 2012, ruby mining at the MRM mine has earned more than 65.7 billion meticals (1.04 billion dollars), according to figures released at the end of April by Gemfields, which owns 75 per cent of the company.

According to the ‘G Factor for Natural Resources’ report, which aims to promote transparency about the level of wealth from the resources shared by Gemfields ‘with the governments of the host countries’ from the mining, oil, gas, timber and fishing sectors, MRM had a total revenue of 9.56 billion meticals (151.3 million dollars) in 2023.

Since Gemfields acquired 75 per cent of MRM – in February 2012, the year mining began, with ruby auctions starting two years later – the mine has accumulated revenues of over a billion dollars, paying the state 16.2 billion meticals (257.4 million dollars) in the same period.

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Last year, the company paid the state 3.3 billion meticals (53.2 million dollars) in royalties and taxes, according to the same report.

MRM is 75 per cent owned by Gemfields and 25 per cent by Mwiriti Limitada (a Mozambican company).

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