The following is an open letter to the gem industry from Victor Kalesha, President of ESMAZ, the Emerald and Semi-Precious Stones Mining Association of Zambia. Over the past several days, you have read news articles talking about a 15% export tax on all gems & minerals leaving Zambia. Today, we published a news brief that announced a suspension of that tax. Due to unpublished behind the scenes details, we offer this letter here in the Roskin Gem News Report. – gr
As president of the Emerald and Semi-Precious Stones Mining Association of Zambia (ESMAZ), I feel compelled to respond to misconceptions and misunderstandings circulating about the emerald mining sector. It’s alarming to see critics who have no grasp of the industry’s complexities, making assertions that are far from the truth.
The emerald mining sector is not a playground for the faint-hearted. It’s a high-risk, high-reward industry that demands resilience, perseverance, and a deep understanding of its dynamics.
We pose two critical questions to our critics:
1. Why do local and international investors shy away from investing in emerald mining despite its potential?
2. Why do investors with substantial resources often abandon their projects after a few years, citing uncertainties and losses?
The experiences of Chinese investors, who built the Levy Mwanawasa Stadium, are a case in point. They invested heavily in the emerald industry but abandoned their project due to uncertainties and losses. Five other Chinese companies followed suit, citing unprofitable operations.
So, how have some companies, like Grizzly and Kagem, managed to survive? The answer lies in their ability to take calculated risks, endure losses, and persist in the face of adversity.
It’s essential to understand that the emerald mining sector is not a guaranteed success story. Many small-scale miners hold onto their licenses, despite incurring substantial losses, because they’re inspired by the likes of Grizzly’s proprietor, who embodies the spirit of a risk-taking entrepreneur.
In this context, the suspension of the 15% gemstone export tax is not a “fluke” or a result of corruption, as some critics would have you believe. Rather, it’s a well-informed decision that takes into account the industry’s complexities and the potential consequences of sustaining an unfriendly tax regime.
We must remind our critics that this tax was introduced in 2018/2019 by the PF government and was subsequently suspended after consultations with stakeholders. The current government’s decision to reintroduce and subsequently suspend the tax is beneficial to the country, as it ensures that the gemstone sector remains viable and continues to contribute to the national treasury through mineral royalty, corporate tax, and presumptive tax.
To our fellow Zambians, we urge you to remember that the emerald mining sector is not a simplistic issue that can be reduced to armchair criticisms. It’s a complex industry that demands a nuanced understanding of its challenges and opportunities. Let’s focus on promoting informed discussions and supporting policies that benefit the nation rather than spreading misinformation and negativity.
We invite all those critics calling innocent people corrupt to come and form partnerships with license holders so as to understand the dynamics of the industry and the rationale behind the suspension of the 15% gemstone export tax.
Furthermore, we would like to remind our critics that the 15% export duty was not only restricted to emeralds but also applied to all kinds of other gemstones mined by the Artisanal and Small-Scale Mining (ASM) sector.
Finally, we call upon the police to investigate and request evidence from the Economic Freedom Fighters (EFF) Secretary-General, Changala Siame, to substantiate his claims of corruption regarding the suspension of the 15% gemstone export tax citing the Minister of Finance as being corrupted.
Signed,
Victor Kalesha
President, ESMAZ
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