Diversified miner Gemfields, which has a stake in the Kagem mine in Zambia, expects the 15% export duty imposed by that country’s government on precious gemstones to boost revenue to be revoked.
This would allow a commercial-quality emerald auction to go ahead in the first quarter of this year, it said on Friday.
The Zambian officials’ decision to revoke a 2019 suspension of the export duty earlier this month directly affected the Zambian emeralds mined by Kagem Mining, in which Gemfields has a 75% stake.
This comes as the state has taken several measures in other areas of the Zambian economy to enhance government revenue as it eyes a recovery from one of the worst droughts in living memory that hit the economy and left it with a hefty budget shortfall.
But Gemfields previously noted that “there was no notice or prior consultation” regarding the policy’s reintroduction.
The group said at the time the move was announced it would engage with the government to seek to reverse its decision or remove the export duty altogether “given the impact on sector sustainability and investment attractiveness”.
Releasing an operational update on Friday, Gemfields said Kagem paused mining for about six months from the start of 2025 as previously announced, using its upgraded wash plant to process its significant stockpiles. Emerald exports have been paused since the start of the year while Zambia’s reintroduced 15% export duty remains in place.
It said Montepuez Ruby Mining (MRM) in Mozambique had been operating as usual since the start of 2025, after illegal miner intrusions in the wake of the civil unrest in that country, where post-election protests disrupted supply chains and interrupted logistics.
Business Day previously reported that Gemfields noted several incidents of illegal miners taking advantage of Mozambique’s civil unrest, including an incident in which more than 200 people attempted to invade the MRM Village, setting fire to the infrastructure built to protect a community cash point.
Gemfields also had to contend with a weaker luxury and gemstone market generally, given economic difficulties in China and geopolitical turbulence.
The group achieved auction revenues of $196m for the year.
Its net debt position was $80.5m at the end of December, before auction receivables of $33.9m, as the group continues to fund MRM’s second processing plant.
Construction of the plant remained materially on budget and on track for completion by the end of the first half, despite the disruptions in Mozambique from October to mid-January 2025, it said.
Business Day reported previously that sales of Gemfield’s stones had fallen. Its most recent auctions brought in $16.1m for emeralds and $46.2m for rubies, materially less than recent years.
The lower figures were due mainly to a Zambian competitor’s oversupply of emeralds in the second half of 2024, compounded by conflicting auction dates, giving rise to a poor Zambian emerald market outlook in the first half of 2025.
Other factors included lower output of premium rubies at MRM and a weaker luxury and gemstone market generally, given economic difficulties in China and geopolitical turbulence.
Gemfields will release its full-year results and on March 27.
With Jacob Webster
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