Gemfields is scrambling for a way out of a 15% tax on exports of emeralds from Zambia, saying the levy should be suspended or removed as it was introduced without consultation and deters investment.
Last month, Zambia gazetted Statutory Instrument 88 of 2024 which revoked the 2019 suspension of the 15% export tax on precious gemstones. Gemfields has now said that it will engage the Zambian government and canvass for the suspension of the export tax.
“The company will engage with the Zambian Government to seek the re-introduction of the suspension of this export duty or to remove it from the legislation given the impact on sector sustainability and investment attractiveness,” said Gemfields.
It explained that the 15% export tax on precious gemstones directly impacted the Zambian emeralds mined by Kagem Mining Limited, in which it holds a 75% interest, with the remainder controlled by Industrial Development Corporation of Zambia.
The tax “directly impacts the Zambian emeralds mined by Kagem,” said the company.
Furthermore, the export tax piles up the company’s statutory payments in the southern African country that is also a top copper producer. Gemfields already paid 6% in mineral royalty taxes, bringing up the effective tax on revenues to 21%, excluding corporation tax of 30%.
Zambia, together with Brazil and Colombia, are the world’s largest exporters of emeralds. As Zambia has ramped up taxes for emerald miners in the country, Brazil’s aggregate tax on revenues stands at 2% in the form of mineral royalty while Colombia’s aggregate tax on revenues is 2.5%, made up of a 1.5% mineral royalty and a 1% national emerald fund contribution. Brazil and Colombia, however, also have corporation taxes of 34% and 33% respectively.
Gemfields said that in 2023 it paid an effective 31% of its revenues to the government of the Republic of Zambia in the form of mineral royalty, corporation tax and dividends. The 15% export tax is likely to further drive up statutory payments by the company this year.
The 15% export duty was originally introduced at the start of 2019 by the previous Zambian government although it was suspended at the end of 2019, ceasing to be applicable with effect from the beginning of 2020.
“Gemfields notes that there was no notice or prior consultation regarding the re-introduction of the 15% export duty. Gemfields understands that several additional measures have also been introduced in other areas of the Zambian economy to enhance Zambian Government revenues in 2025,” said the company.
The Zambian woes have been mounting for Gemfields. Last month, the company said a claim had been filed against Kagem by rival miner, Grizzly Mining Limited, its sister company Pridegems Mines Limited, and proprietor Abdoulaye Ndiaye.
The claim related to “alleged unlawful occupation” by Kagem of an area known as Kamakanga House as well as “conspiracy to injure business reputation” and goodwill.
Gemfields and Kagem said these claims were entirely without merit.
“Kagem, which had previously filed its own claim in Zambia against Grizzly, Pridegems and others in mid-November 2024 in relation to another area known as the BISMA licence, is in the process of preparing a robust defence in conjunction with its legal advisers.”
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