Cecilia Jamasmie | December 19, 2019 | 9:49 am Markets Africa Diamond
Kagem mine is the world’s single largest producer of emeralds, accounting for about 25% of global production. (Image courtesy of Global Business Reports | Twitter.)
Zambia will suspend a 15% export tax on gemstones, excluding diamonds, from Jan. 1 next year as the levy, aimed at raising more revenues ended up affecting the country’s output.
The news was welcomed by Gemfields (JSE: GML), which runs Kagem, the world’s largest emerald mine, located in the Copperbelt province of Zambia.
Mining accounts for more than 70% of Zambia’s foreign exchange earnings
The company has had to pay 21% in taxes for its shipments from the African country this year, as its gemstones were also subject to a long-standing 6% mineral royalty.
That compares with only 2.5% and 2% producers pay in large-emerald exporting countries Colombia and Brazil, respectively, Gemfields said.
The duty hit small-scale gemstones miners the hardest, as they were unable to attract significant investment this year. Mining accounts for more than 70% of the southern African nation’s foreign exchange earnings.
Gemfields is also the operator and 75% owner of the Montepuez ruby mine, which is located in Mozambique. It also holds controlling interests in various other gemstone mining and prospecting licences in Zambia, Mozambique, Ethiopia and Madagascar