Zambia has reintroduced an emerald export duty, imposing a significant financial burden on Gemfields, a leading gemstone mining company. The new policy, implemented without prior consultation, raises the total effective revenue tax for Gemfields’ 75%-owned subsidiary, Kagem Mining, to 21%. This includes a 6% mineral royalty tax already in place.
The announcement has already impacted Gemfields’ market performance. In London, the company’s shares fell by 4.3% to 6.7p per share, while in Johannesburg, they dropped by 12%. This decline reduced Gemfields’ market capitalization to around $106 million.
Gemfields has expressed concerns about the financial pressure the tax places on the gemstone mining sector. In 2023, when no export duty was applied, Kagem Mining contributed approximately 31% of its revenues to the Zambian government through mineral royalties, corporate taxes, and dividends. The company now plans to engage with Zambian officials to seek the removal or suspension of the export duty, warning that the tax could deter investment and harm the industry’s long-term sustainability.
Zambia, the world’s second-largest emerald producer after Colombia, has introduced the export duty as part of broader fiscal measures to boost government revenues. The country aims to achieve a GDP growth rate of 6.6%, maintain inflation between 6% and 8%, and reduce its budget deficit to 3.1% of GDP. According to PwC, Zambia’s tax revenues are expected to grow by 20%, with domestic revenues and grants projected to increase by 26%.
Despite the challenges in Zambia, Gemfields maintains a diverse global portfolio. The company owns the luxury jewellery brand Fabergé and holds a 75% stake in the Montepuez ruby mine in Mozambique.
The reintroduction of the export duty marks a critical moment for Gemfields and other industry players. The coming months will test their ability to adapt to Zambia’s evolving tax policies while sustaining operations in one of the world’s most important emerald-producing regions.
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