Gemfields Pauses Emerald Sales Due to New Tax in Zambia
Gemfields, a big company that mines coloured precious stones, has stopped selling emeralds from its Kagem mine in Zambia. This happened because the Zambian government brought back a 15% tax on exports. However, Gemfields hopes the government will remove this tax soon. In order to start selling again.
The Impact of the New Tax
Zambia is the world’s second-largest producer of emeralds, right after Colombia. They first put this 15% tax on emerald exports in early 2019 but got rid of it in January 2020 due to pressure from the industry. Before the tax came back, Gemfields had already stopped mining at Kagem because there were too many cheap emeralds in the market.
The company said: “Kagem hopes the duty will be removed soon so we can have an auction for good-quality emeralds in early 2025”. If the tax stays, Gemfields’ local company in Zambia, Kagem Mining, will face a total tax rate of 21%, including the existing 6% tax on minerals. This could force them to let go of some workers, according to CEO Sean Gilbertson. Zambia wants its economy to grow by 6.6%, keep inflation between 6% and 8%, and reduce its budget deficit to 3.1% of its total economy. They expect to get more money from taxes and other sources, with tax revenues going up by about 20%.
Good News from Mozambique
On a brighter note, Gemfields announced that production has restarted at its Montepuez ruby mine in Mozambique. Operations were halted in December due to violence after the Presidential elections, which sadly led to two deaths. Despite these problems, the company confirmed that building a second processing plant at the mine is still on track and within budget. They expect to finish it by mid-2025. Also, Gemfields plans to share its yearly financial results on March 27.
