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Gemfields Commercial Quality Emerald Auction Realises $18.6M

Coloured gemstone producer Gemfields announced that it had realised $18.6 million from its auction of commercial quality emerald rough held in Lusaka, Zambia from August 19 to 22. The rough was sourced from Zambia’s Kagem mine, which is 75 percent owned by Gemfields with the Industrial Development Corporation of Zambia holding the remainder.

Of the 35 lots offered, 26 were sold at an average price of $4.75 per carat. The auction saw 34 companies placing bids. Gemfields said that the 33 auctions of emeralds and beryl mined at Kagem since July 2009 have generated an aggregate $608 million in revenue.

Adrian Banks, Gemfields’ Managing Director of Product & Sales, commented, “We are pleased that the green shoots of recovery in the emerald sector first observed at our May 2019 emerald auction in Singapore, have continued to grow this week in Lusaka. The Indian market, which is particularly important when it comes to commercial quality emeralds and which has been navigating challenging conditions for some time, appears to have turned the corner and we hope will continue to go from strength to strength.”

He added, “This auction saw the highest number of participating companies at any of our commercial quality auctions held in Lusaka, and we congratulate Caibaocheng on becoming the first Chinese customer to win at any Gemfields emerald auction. As usual, and given our long-term vision and loyalty to the true value of Zambian emeralds, we have elected to retain auction lots that we believe command higher prices than those presently offered by the market.”

He went on to say, “Kagem’s biggest impediment remains the 15 percent Zambian export duty imposed on emeralds since January of this year. When combined with the pre-existing 6 percent mineral royalty tax, Zambian emerald exporters must now pay an effective 21 percent turnover tax on their revenues.”

He summed up, “The financial impact is being acutely felt by incumbent producers like Kagem, severely inhibiting money available for capital investment in growth and handing the tactical advantage to other emerald-producing countries like Brazil and Colombia, neither of which have any export duty on emeralds. We continue to liaise with the key government departments in seeking resolution and remain hopeful that a solution will be found.” 

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