- Gemfields Group Limited
- 19 February 2025 10:23:42
Source: Sharecast
The Zambian government originally revoked the 2019 suspension of a 15% export duty on precious gemstones on 1 January, directly impacting the stones mined by Kagem Mining, which is 75%-owned by Gemfields and 25%-owned by the government's Industrial Development Corporation.
The levy applied on top of the existing 6% mineral royalty tax and meant that Kagem faced an effective tax on revenues of 21% (in addition to corporation tax of 30%).
That compares with taxes on revenues of just 2% and 2.5% in Brazil and Colombia, respectively – the world's next largest emerald exporters after Zambia.
Gemfields, which said it was given no notice of the New Years Day decision, has seen its share price tumble 17% since the start of 2025 to 5.75p as of Tuesday's close.
However, shares were 1% higher on Wednesday after Zambia's finance minister suspended the controversial duty effective immediately.
"We express our sincere thanks to President Hakainde Hichilema's government for their prompt and impressive action in addressing the 15% export duty on precious gemstones," said Gemfields' chief executive Sean Gilbertson.
"The Zambian emerald sector has delivered phenomenal growth over the last 16 years and is today - by a significant margin -the world's largest emerald exporter. The government's collaborative approach and decisive action are clear demonstrations of its intent to deliver growth and jobs for Zambia and this step puts our industry back on track to continue that trajectory."