Gemfields settles R100m Mozambican claim, denies liability

iStock
iStock

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.

ZAR/USD
17.60
(+0.15)
ZAR/GBP
23.07
(+0.28)
ZAR/EUR
20.72
(+0.26)
ZAR/AUD
12.66
(-0.02)
ZAR/JPY
0.17
(+0.42)
Gold
2019.20
(-0.42)
Silver
28.95
(-0.34)
Platinum
989.00
(+0.47)
Brent Crude
44.95
(+1.33)
Palladium
2241.00
(+1.04)
All Share
56757.73
(-1.56)
Top 40
52435.65
(-1.72)
Financial 15
9897.96
(+0.10)
Industrial 25
74671.49
(-1.98)
Resource 10
58948.78
(-1.89)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Do you think it was a good idea for the government to approach the IMF for a $4.3 billion loan to fight Covid-19?
Please select an option Oops! Something went wrong, please try again later.
Results
Yes. We need the money.
11% - 944 votes
It depends on how the funds are used.
74% - 6291 votes
No. We should have gotten the loan elsewhere.
15% - 1294 votes
Vote