Gemfields plc, the company that operates the Kagem emerald mine (“Kagem”) in Lufwanyama, says it has been able to contribute more than KR687 million to Zambia’s direct foreign earnings over the past three years alone.
The approach has already turned Kagem around, from a long history of loss making to one where it has been able to increase achievable prices on the global markets almost tenfold .
The mining company has reiterated its commitment to the government and people of Zambia, pledging to continue to increase the benefit that the country receives from its gemstone resources.
Kagem, which is 25% owned by the Government of Zambia, produces approximately 20% of the world’s global rough emerald supply, with worldwide production estimated at US$500 million (ZMW2.6 billion) per year.
The company is pioneering a new approach to gemstone mining that integrates world-class mining with a strong marketing strategy and a commitment to local value addition in areas of core competence.
The approach has already turned Kagem around, from a long history of loss making to one where it has been able to increase achievable prices on the global markets almost tenfold and where it has been able to contribute more than ZMW687 million to Zambia’s direct foreign earnings over the past three years alone.
All these earnings have been repatriated back to Zambia, where they have been used to settle old debts inherited from the previous management and continually reinvest in the Kagem mine and the global marketing of Zambian emeralds.
“Gemfields’ goal is to lead the way in terms of coloured gemstone exploration, mining, operational efficiency and global marketing, all the while ensuring that the benefits are fairly distributed among all our various business partners, investors and local stakeholders,” explained Chief Executive Officer Ian Harebottle.
Gemfields, a London-listed coloured gemstone mining company, acquired a 75% stake in the then bankrupt Kagem in 2008, with the remaining 25% being held by the Government of Zambia on behalf of the Zambian people.
The company is committed to the long-term re-capitalisation of the Kagem mine, and after an investment in excess of ZMW550 million, it continues to re-invest around ZMW150 million into the mine each year.
This policy has been directly responsible for Kagem’s success in recent years, ensuring that Kagem – and Zambia as a nation – is increasingly recognised as a global leader in the coloured gemstone industry, and allowing Kagem to become the single largest emerald industry contributor to Zambia’s national economy, despite it being just one of Zambia’s numerous registered emerald producers and exporters.
Kagem employs approximately 650 people in Zambia, including permanent staff and contractors, of which only 46 or 7% are expatriates – all of which hold valid and approved work permits.
Kagem employees rank among the highest paid employees in the emerald industry in Zambia, with even the lowest paid permanent employees receiving in excess of ZMW2,200 per month including benefits.
“Gemfields remains committed to turning the coloured gemstone business into a transparent market allowing investors, local communities and national economies to benefit from our operations and expertise.
Gemfields believes in and sees significant benefit in being fully transparent in all our dealings and partnerships.
Full disclosure of information and transparency in our business process is a crucial factor of our success. Our mining ethics go beyond compliance as we aim to set new standards within this sector,” added Mr Harebottle.
Gemfields plc is a leading gemstone miner listed on the Alternative Investment Market (AIM) of the London Stock Exchange .
In addition to the Kagem emerald mine, Gemfields has a 50 percent interest in the Kariba amethyst mine in Zambia.
The company also owns controlling stakes in highly prospective ruby deposits in Mozambique and various licenses in Madagascar including ruby, emerald and sapphires deposits.
In July 2009 Gemfields commenced a formal auction programme for its Zambian emeralds