Kagem Mining
Wikimedia Commons

Emeralds from the Kagem mine in Lufwanyama District in Zambia have been sold at auction for a total of US$10.8 million.

Proceeds from the auction will be fully repatriated to Zambia, with all royalties due to the Zambian Government paid on the full sales prices achieved at the auction, the company stressed.

The auction was of predominantly commercial quality rough emeralds mined by Kagem Mining - believed to be the world’s single largest producing emerald mine - which is 75% owned by Gemfields and 25% by the Government of the Republic of Zambia.

The sale, monitored by representatives of the Zambian Government, took place last week in the Indian city of Jaipur, the main global centre for emerald trading.

Bidding at the auction was thinner than usual, with several customers noting decreased availability of financing for gemstones in India due to allegations surrounding fraudulent bank lending to Nirav Modi and Gitanjali, two leading diamond and jewellery groups in India.

But Kagem remains optimistic for the future of Zambian emeralds in the world market, noting that its next auction, this time of predominantly higher quality emeralds, is presently scheduled to take place in Lusaka later this year.

“This auction sees Kagem pass US$500 million of aggregate revenue since Gemfields acquired its 75% stake in 2008,” comments Gemfields CEO, Sean Gilbertson.

“We believe this is the first time a coloured gemstone mine has transparently attained this milestone with publicly available data.

“The Zambian Government’s share of these revenues – in the form of royalties, corporation tax and dividends – exceeds US$105 million, or 21% of the revenue generated, a figure which also solidly exceeds Kagem’s aggregate net profits over the same period.

“We congratulate our hard-working team and our partners in Kagem, the Government of the Republic of Zambia.”

The auction saw 31 companies placing bids, generating total revenues of US$10.8 million with an overall average value of US$3.05 per carat.

Robust demand resulted in 95% of the offered carats being sold.

Gemfields is a world leading supplier of responsibly sourced coloured gemstones.

The company’s 27 auctions of emeralds and beryl mined at Kagem since July 2009 have generated US$506 million in total revenues.

Gemfields has developed a proprietary grading system and a pioneering auction and trading platform to provide a consistent supply of coloured gemstones to downstream markets, a key component of Gemfields’ business model and has played an important role in the growth of the global coloured gemstone sector.