Chinese demand for rubies expected to sparkle – by Tess Ingram (Australian Financial Review – July 9, 2017)

The takeover of London-listed gemstone miner Gemfields will leave an Australian ruby junior as the only direct-listed exposure to a burgeoning sector keenly watched by China.

Gemfields, one of the world’s largest miners of coloured gemstones and the owner of the Faberge jewellery brand, will be delisted at the end of the month after its major shareholder Pallinghurst Resources triumphed in a bidding war for the company over China’s Fosun Gold Holdings.

Minority shareholders in Gemfields were outraged when Pallinghurst, a South-African listed fund chaired by former BHP Billiton chief Brian Gilbertson, lobbed a nil-premium, all-share bid in May for the 53 per cent of the company it didn’t already own. Despite a rival cash bid from the Chinese conglomerate, Pallinghurst’s strong grip on Gemfields saw it prevail, with it now holding about 85 per cent of the company ahead of its offer closing on July 18.

The corporate activity has sparked a renewed focus on the growing ruby market, which had long been hampered by erratic production from artisanal miners.

In recent years Gemfields has used its position to ensure continuity of supply and increased advertising, which saw demand pick up and prices for emeralds and rubies rally, according to SP Angel mining analyst John Meyer.

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