Gemfields subsidiary Kagem mining recorded an all time high in emerald price per carat of $85.26 in a coloured stone auction whose proceeds were $27.2 million the highest this year. The coloured stone sale attracted 48 companies in record bids of which 88% were absorbed in carat terms or 87% in lot terms. The November Singapore auction brings the total proceeds Gemfields Kagem emeralds and beryl to $635 million since July 2009.
Adrian Banks, Gemfields’ Managing Director of Product and Sales, commented:
“Kagem has realised $79 million of auction revenues in 2019, the second‐best calendar year performance since the auction system was introduced a decade ago. The recovery being experienced by our auction customers therefore appears to have solid foundations, as is further evidenced by the 48 companies placing bids, a record for any Gemfields emerald auction. While the auction’s overall price‐per‐carat was also a record, each auction has a slightly different composition and should not be directly compared.
Despite the robust mining and sales performance, the Kagem team’s sterling efforts are unlikely to be rewarded given that the auction revenues of $79 million are poised to suffer both 15% export duty and 6% mineral royalty tax, totalling $17 million. The 6% mineral royalty tax itself is then again taxed at the corporation tax rate of 30%, as are Kagem’s profits. The effective tax rate is therefore crippling for any business.
In addition to our stalwart clients from India, we also congratulate Caibaocheng of China and Gemstar of Israel, each of whom won three lots of fine quality Zambian emeralds.”
Read also: Gemfields Kagem introduces ‘block chain nano tech’ emerald traceability solution
Recently Gemfields implemented a state of the art coloured stone traceability nano block chain technology that will trace its stones from the mine to the consumers. This would be an additional technology inclusion after the earlier coloured stone paternity test.
Kagem mine is 75% owned by Gemfields mining and 25% owned by the government of Zambia through its investment holding vehicle ZCCM-IH.
The Kwacha Arbitrageur