Gemfields Shifts Singapore Emerald Auction to Zambia

Jul 2, 2013 6:42 AM By DeenaTaylor

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RAPAPORT... Gemfields will hold its next auction of rough emeralds in Lusaka after the Zambian government blocked the company from exporting the goods to Singapore, where it was previously scheduled to hold a sale in June.

The company will sell higher-grade rough emeralds from its Kagem mine in Lusaka on July 15 to 19, 2013.

At a press conference in Lusaka on April 5, Yamfwa Mukanga, the then minister of Mines, Energy and Water Development, made a statement seemingly restraining the Kagem emerald mine and other producers from auctioning emeralds outside of Zambia, according to Gemfields. Kagem is 75 percent owned by Gemfields with the remaining 25 percent owned by Zambia. It is the only Zambian emerald producer that has sold its gems via overseas auctions in recent years with proceeds of the auctions repatriated to mine.

Gemfields explained that the delay in the auction resulted in lower revenue for the company during the fiscal year that ended in June 2013. Gemfields held two auctions during the year generating aggregate auction revenue of $42 million, compared with four auctions held in 2012 that generated $77.9 million.

The company said that it will continue to work actively with the ministry to find a solution to support the optimization of Kagem’s revenue and the continued growth of the wider Zambian emerald sector.

In May, Christopher Yaluma was reappointed as minister of Mines, Energy and Water Development. Subsequently, on June 18, the ministry which appoints one director to Kagem's board, replaced their incumbent director with veteran mining geologist Sixtus Mulenga.

"Although there is presently no law in Zambia that prohibits the export of emeralds for auction purposes, we naturally wish to ensure that we work collaboratively with the government of the Republic of Zambia, who are our fellow shareholders in the world-class Kagem emerald mine," said Ian Harebottle, the CEO of Gemfields. "It remains our hope that a framework solution, which allows Kagem to maximize its revenues will soon be found.”

Tags: DeenaTaylor, Gemfields, Kagem, zambia