Gemfields announced plans to establish a new and independent operational grievance mechanism in keeping with industry best practice. Photo: Reuters

JOHANNESBURG – JSE-listed coloured gemstone producer Gemfields has agreed to pay £5.8 million (R103.6m) to settle claims of human rights violations to the Montepuez Ruby Mining (MRM) in northern Mozambique.

The agreement was on a no-admission-of-liability basis and would be paid to English human rights law firm Leigh Day, the company said yesterday.

In addition to the settlement, Gemfields announced plans to establish a new and independent operational grievance mechanism (OGM) in keeping with industry best practice and as advocated by the UN Guiding Principles on Business and Human Rights.

The OMG would ensure that community members are able to raise grievances at the mine and its implementation would be overseen by international experts. 

Leigh Day brought the claims on behalf of 273 Mozambicans who alleged that they, or their relatives, were victims of  serious human rights abuses at or around the mine, a joint venture between Gemfields and its Mozambican partner, Mwiriti.

Montepuez is home to the world's biggest known ruby deposits, with 40 percent of them from the mine.

While Gemfields denied liability for the allegations, it had agreed to the settlement to balance the needs of its stakeholders and avoid tainting MRM's relationship with sections of the local community. 

Sean Gilbertson, Gemfields’ chief executive, said the settlement balanced the needs of all stakeholders. 

Gilbertson is the former chief executive of BHP Billiton, the world's biggest mining house. 

“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,” said Gilbertson, adding that the company wished to improve the trust and transparency with communities.

Daniel Leader, a partner at Leigh Day, said the settlement was a step in the right direction.

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