National Jeweler Network

Market Developments

Zambia blocks Gemfields from exporting emeralds

2013-06-06

London--Bloomberg reported Monday that the government of Zambia has barred mining company Gemfields Plc from exporting emeralds for its upcoming sale in Singapore, scheduled for June 10 to 14.

According to the report, the country’s Mines, Energy and Water Development Minister Yamfwa Mukanga told Bloomberg by phone on June 1 that selling gemstones outside of Zambia is not permitted and that the government had blocked Gemfields from exporting emeralds last week. http://www.bloomberg.com/news/2013-06-03/gemfields-barred-from-selling-zambian-emeralds-in-singapore-sale.html

In a statement issued to National Jeweler on Wednesday, Gemfields said it is hoping to resume its sales outside of Zambia soon.

“We do not believe that there is any law that makes it illegal to hold an auction offshore,” said CEO Ian Harebottle. “We are continuing to engage the Zambian government and believe that the matter should be amicably sorted out within the not-too-distant future.”

In April, Gemfields issued a warning to stakeholders about possible problems with exporting emeralds and amethysts from the nation after Zambian President Michael Sata made a declaration that all colored gemstone sales should be kept within the country’s borders in the name of beneficiation.

Per a previously reached agreement with the government, Gemfields already had agreed to hold its April auction in the Zambian capital of Lusaka but planned on holding the June sale in Singapore. The fate of that auction remained unclear as of Wednesday afternoon.

Gemfields owns a 75 percent stake in Zambia’s Kagem Emerald Mine, which accounts for a bulk of the company’s production. The government holds the remaining 25 percent.

Gemfields also has a 50 percent interest in the Kariba amethyst mine in Zambia, with the other half belonging to the government, and mines rubies in Mozambique.

Since 2009, all 11 of Kagem’s auctions have taken place outside of Zambia, in India and Singapore, generating a total of $160 million.

Gemfields has said that being forced to sell the emeralds in Zambia only would negatively impact revenues and the overall development of the country’s gemstone sector and place Zambian emeralds at a competitive disadvantage worldwide.