Greenland Ruby, which made waves as one of the first new major gemstone sources in years, has filed for an in-court restructuring, citing an inability to meet its debt obligations.

In-court restructuring is a process comparable to Chapter 11 in the United States. The company has filed restructuring positions in both the bankruptcy court in Nuuk, Greenland, and the Maritime and Commercial High Court in Copenhagen.

Greenland Ruby CEO Arnt-Eirik Rørnes tells JCK he’s enlisted restructuring specialists Alvarez & Marsal to find a buyer for the miner, which is majority owned by Norway’s LNS Group. (Nalik Ventures, a local government-related entity, owns 12%.)

“The owners are not willing to take the project any further,” he says. “The funding has been drained out. It’s sad because many of the [people involved] really believed in the project but you need funding.”

He professes confidence that Greenland Ruby will find a buyer.

“We wouldn’t have put money into this if we weren’t convinced we could do a deal,” Rørnes says. “The owners would like to see the project continue. It’s a very small community in Greenland, and this mine is very important to them.”

Erik Jens, the former ABN Amro Bank executive who is acting as a company adviser, says that the mine is seeking a “strategic partner” who understands the downstream. It could also have multiple owners with different competencies, Rørnes says.

Greenland Ruby’s Aappaluttoq mine, which also produces pink sapphires, has been on care and maintenance since it stopped production at the end of 2022. It had hoped to restart mining next year, but Rørnes concedes that won’t happen without a new owner.

The company has spent most of this year trying to cut costs and market its gems, and now has only a “handful” of employees, down from over 100 at its height, according to Rørnes.

As for what went wrong, he says that the mine did well from a production standpoint and that the market was open to Greenland gems, but mostly for better-quality goods.

“The higher-quality goods basically sell themselves,” says Rørnes. “But to get the market sustainable, you need to focus on the lesser qualities, which is where a lot of the value in the mine lies. And we haven’t really managed to break the market in those more commercial qualities. We tried to find the right market within those categories, but in the end we ran out of liquidity.”

Adds Jens: “The commercial goods can be [used] for jewelry that is affordable to the next generation. But they were maybe priced a little too high compared to what’s in the market. That’s because the cost of mining and the cost of the operations was too high. That’s where the bottleneck was. The idea is to reduce the mining costs and price it to the market.”

Rørnes couldn’t provide an estimate how long the sales process might take. The company said its Bangkok sales office will continue to sell gemstones during the restructuring.

(Photo courtesy of Greenland Ruby)

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