Gemfields recently said that ruby deposits at its 75 percent-owned Montepuez project in Mozambique are not affected by fighting in central Sofala province between government forces and the opposition group known as Renamo (an acronym in Portuguese for the Mozambique National Resistance).
The project was believed to contain about 40 percent of the world’s known supply of the red-colored stones.
Company chief executive Ian Harebottle said they had plans to boost monthly production at Montepuez to 2.5 million carats by July 2014, from about 1 million carats during the current trial phase.
“That’s because red is the color of prosperity, health and wealth in China so there’s a natural big demand for rubies,” he said.
Such confidence in the future of the company’s operations in Mozambique, following the rising tension, was meant to quell growing fears from investors.
The question was how long would this assurance last?
Although, armed Renamo fighters, had been carrying out random raids and ambushes since April, the situation appeared to be slowly spiraling out of control last month after government troops overran the opposition leader Alfonso Dhlakama's bush base camp in Sofala.
Dhlakama reportedly escaped into the surrounding mountains and was still playing cat and mouse with the government troops.
Following the raid on October 21, Renamo said that it was abandoning its 1992 peace accord with the ruling Frelimo party that ended the country's civil war, raising fears of a renewal of conflict.
"Peace is over in the country ... The responsibility lies with the Frelimo government because they didn't want to listen to Renamo's grievances," Renamo spokesman Fernando Mazanga was quoted as saying at the time by Reuters.
Since then, the government troops and Renamo continue with their sporadic attacks at each other.
Civilians are also bearing the brunt of the internecine clashes.
Recently, a gang carrying guns and machetes attacked and seriously wounded a wealthy businessman in northern Mozambique.
Some of the attackers were clad in dark green uniforms associated with Renamo during the assault on a property in the northern province of Nampula.
"Ten men came to the smallholding, three of them dressed in Renamo uniforms carrying AK47s and the rest carrying machetes," provincial police spokesman Miguel Bartolomeu said. "They said they wanted money."
When the man, who runs a driving school, failed to give them money the group went on a rampage, attacking him and molesting his workers and security guards, Bartolomeu said.
"They attacked the owner with machetes. He is in a serious condition in Nampula Hospital," he said.
They also torched three houses and several vehicles, he said.
Efforts by President Armando Guebuza to meet Dhlakama face-to-face early November for talks were rejected.
Renamo’s spokesperson said the invitation “sounds cynical to us, because we don't believe that President Guebuza is unaware of the conditions facing Afonso Dhlakama after the attack and occupation of his residence in Satunjira, and the recent attack and occupation of his residence in Beira by government forces”.
Although the rebels are said to be demanding for more representation in the armed forces and changes to the electoral law, analysts are convinced that Renamo had an eye on the natural resources that were being found in the country.
Mozambique held some of the world's largest untapped coal and offshore gas deposits
About 150 trillion cubic feet (tcf) of gas had been found off Mozambique's shores, enough to supply Germany, Britain, France and Italy for 15 years, and the government and companies exploring wells have estimated there may be potential to double that estimate.
Renamo was reportedly not happy with the presence of foreign companies “sharing the national cake”.
Unsettled by this unfortunate turn of events, mining company Rio Tinto reported early this month that it was withdrawing expatriate employees' families from Mozambique for their safety.
Rio Tinto mines and exports coal from northwest Tete province.
"The safety of employees and their families is the number one priority," Rio Tinto Coal Mozambique said, although it called this a temporary precaution.
Other major companies developing big coal and gas reserves in the former Portuguese colony, Brazil's Vale, U.S. oil company Anadarko and Italian oil and gas group Eni, said they were closely following political developments there, after clashes between the government army and opposition Renamo guerrillas.
Guebuza said he does not believe Mozambique ran the risk of sliding back into the kind of civil war that ravaged the country from independence in 1975 to 1992.
Companies, such as Gemfields should therefore bank on the Mozambican government and Renamo reaching a peace pact.
The Montepuez project might not be in direct danger from the disturbances in Sofala, but that should not be a source of comfort for Gemfields as criminals are now taking advantage of the fragile state.
Only time will tell, if Gemfields would be in a position to continue with plans to boost output at this Mozambican project.
We, however, hope that violence would be averted, not only to allow Gemfields fulfill their plans, but also allow Mozambique’s economy to continue on an upward trajectory and help lift millions of ordinary citizens still trapped in abject poverty.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
