Gemfields settles R100m Mozambican claim, denies liability

JSE-listed mining company Gemfields announced on Tuesday that it would pay £5.8m (about R100m at current exchange rates), on a no-admission-of-liability basis, to settle claims brought against it by a group of 273 Mozambicans related to a mining concession in northern Mozambique.  

The Mozambicans, represented by English law firm Leigh Day, had argued that they and their relatives were victims of human rights abuses at or around the Montepuez Ruby Mining Limitada’s mine in northern Mozambique, the law firm said it a statement.

Gemfields owns 75% of Montepuez, an open-pit ruby mine, according to its website.

In a statement, Gemfields acknowledged that, in the past, instances of violence had occurred on and around the MRM licence area, "both before and after Gemfields' arrival in Montepuez". But the group said it had consistently maintained that it was not liable for the alleged incidents set out in the claims.

On Tuesday it said it had decided to conclude the settlement with Leigh Day, as it "best balances the interests of the assorted stakeholders and avoids tainting MRM's relationship with sections of the local community by contesting protracted and expensive litigation against the claimants".

Sean Gilbertson, Gemfields' chief executive officer, added: "Given a complex array of considerations and the likely protracted nature of the mooted litigation, we believe today’s settlement best balances the interests and futures of the assorted stakeholders.

"Vitally, we wish to ensure that we are regarded as trusted and transparent partners to members of our local communities, rather than legal adversaries."

Grievance mechanism, training fund 

In addition to the settlement amount, Gemfields will set up an independent operational grievance mechanism to enable community members to lodge complaints more easily, and has committed to creating a new agricultural development and training fund of at least £500 000, or R8.9m at current exchange rates. 

Daniel Leader, partner at Leigh Day, said in a statement that the settlement "provides significant redress to our clients".

"[It] importantly puts in place a credible and independent mechanism for providing remedy to those we have been unable to represent. These incidents should never have happened. However, we commend Gemfields for engaging constructively to resolve this case promptly and for putting in place an independent grievance mechanism," he said.

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