Gemfields market value drops following Zambian government announcement

Mines minister Yamfwa Mukanga announced on Friday that the government is planning to ban the sale of Zambian gemstones outside of the country – a move that will restrict mining companies to domestic sales only, and prevent them from exporting their product overseas.

“All those planning to auction their emeralds should do so in Zambia. If possible, we would want all gemstones to be sold in the country,” he explained at a press conference.

Anti-corruption campaigners have estimated that £5 billion or more has been illegally siphoned out of Zambia over the past 10 years, as a result of crime, corruption and tax evasion, and the government’s new plans aim to “enhance transparency and eliminate middlemen”.

But Gemfields CEO Ian Harebottle warned that the move would “potentially endanger the health of the sector immediately after they have begun to deliver meaningful positive results on behalf of stakeholders.”

The company owns 75 per cent of north-Zambia-based Kagem, the world’s largest emerald mine, with the remaining stake owned by the Zambian government – the entire output from which has been sold abroad through 11 auctions.

Emerald mining will also be affected by the proposed action.