Gemfields hit by shock 15% export duty on Zambian emeralds

ZAMBIA has imposed a shock 15% export duty on precious gemstones adding further pressure on Gemfields which operates the country’s Kagem emerald mine.Sean Gilbertson, CEO of Gemfields said in an announcement to the JSE on Wednesday that there had been no prior consultation regarding the reintroduction of the duty.Combined with an existing 6% mineral royalty tax, the export duty – effective from January 1 – takes the effective tax on Gemfields’ emerald revenues to 21%. This compares to an aggregate tax of 2% in Brazil and 2.5% in Colombia which are Zambia’s main competition in emerald exports globally. Gemfields also pays 30% in corporation tax.“This directly impacts the Zambian emeralds mined by Kagem Mining Ltd,” said Gilbertson in the statement. He added Gemfields would “engage” with the Zambian government in an effort to have the export duty suspended again “given the impact on sector sustainability and investment attractiveness”.The duty was revoked in 2019 after major pressure from the local precious gemstone sector in Zambia on its government.“Gemfields understands that several additional measures have also been introduced in other areas of the Zambian economy to enhance Zambian Government revenues in 2025,” said Gilbertson.In August, the Zambian government proposed a new Minerals Regulation Commission Bill, which seeks to “regulate and monitor the development and management of mineral resources” in Africa’s second-biggest copper producer.Zambia’s Chamber of Mines, the main mining industry body, and the Association of Zambian Mineral Exploration Companies said in a joint statement at the time that the bill would destabilise the reputation of Zambia’s mining sector.The export duty on gemstones heaps further pressure on Gemfields which recently suspended production at Kagem for up to six months as a result of a poor emerald market outlook for this year. Gemfields said it would continue to process surface stockpiles of ore at Kagem, but added that there were “disturbed emerald market dynamics” owing to oversupply from Zambia.The company was also forced to suspend production at its Montepuez Ruby Mine in Mozambique during December following election-related violence. Protestors attacked the Montepuez mine village resulting in the deaths of two people.Ultimately this raises questions about pressure on Gemfields’ balance sheet. The company said on December 24 that “continues to monitor working capital as it navigates the prevailing challenges”. A round of cost cutting was under consideration, it added. Shares in Gemfields fell nearly 12% in Johannesburg today.The post Gemfields hit by shock 15% export duty on Zambian emeralds appeared first on Miningmx.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com