Gemfields plans to step up output with $100m of capital spending over the next three years after annual profits almost doubled.

The miner of rubies and emeralds said production volumes were set to double at Montepuez, its ruby mine in Mozambique, while output from Kagem, an emerald mine in Zambia, should rise up to 50 per cent over the same period.

The UK-listed group, which also owns the Fabergé luxury brand, is trying to emulate the diamond sector in using marketing to raise public demand for its gemstones.

Gemfields is thought to own the largest ruby and emerald mines in what is a fragmented sector with many small-scale producers.

Ian Harebottle, chief executive, said sales of coloured precious stones were being helped by relative uncertainty in the diamond sector. Global diamond sales fell last year after overstocking and a slowdown in demand in China.

“Because diamonds are struggling, we have seen a lot more people looking to coloured [gemstones],” said Mr Harebottle. For cutters and polishers, rubies and emeralds provide less cash outlay and higher margins than for diamonds, he added.

The miner’s expansion plans will push up capital spending, after it halved last year to $12m. The plans will be fully funded through agreed bank lending, Mr Harebottle said.

In the year to June 30, Gemfields revenues rose 13 per cent to $193m, while net income rose 91 per cent to $23.5m. The company’s shares rose 2.8 per cent to 46.5p.

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