Zambia Re-Introduces 15% Export Duty on Emeralds: This on Top of Lower Sales and Stiff Competition
Gary Roskin –
Roskin Gem News Report –
Last week, we reported that Gemfields was cutting costs due to lower-than-expected emerald auction results (see Mozambique…).
It was noted that competition from Zambian producers had “disturbed the emerald market dynamics,” resulting from an oversupply of Zambian rough.
Those lower auction sales, coupled with lower global retails sales, plus competition from another Zambian mine, have worsened the situation. To compound matters, Zambia has imposed a 15% emerald export tax. This development does not bode well for Gemfields or Grizzly Mining, Gemfields’ chief Zambian rival.
Grizzly Earns $22m from Latest Emerald Auction
The company offered mid- to high-grade rough emeralds produced from the Grizzly mine in Zambia. Of the 164 lots on offer, 157 lots were sold, totaling 1.93-million carats.
The auction contributes to a positive quarter for the company, with recent expansion initiatives at the mine also having shown strong production numbers, comments chairperson Abdoulaye Ndiaye
Tap here to review the original post in Creamer Media’s Mining Weekly
Although Gemfields has reportedly appealed to the Zambian government requesting no new taxes, there is no word on whether Zambia is considering the matter.
from Gemfields
LONDON, 8 JANUARY 2025 –
Gemfields –
“Gemfields has become aware that a new statutory instrument in Zambia dated 30 December 2024 and which came into effect on 1 January 2025 (S.I. No. 88 of 2024, the Customs and Excise (Precious Stones) (Export Duty) (Suspension) (Revocation) Order, 2024) has revoked the 2019 suspension of a 15% export duty on precious gemstones. This directly impacts the Zambian emeralds mined by Kagem Mining Limited (“Kagem”) which is 75% owned by Gemfields and 25% owned by the Zambian Government’s Industrial Development Corporation.”
Translation: Zambia is imposing a 15% export duty tax on all emeralds.
According to Gemfields, “this 15% export duty now applies on top of the existing 6% mineral royalty tax and meaning that Kagem faces an effective tax on revenues of 21% (in addition to corporation tax of 30%).”
“Brazil, Colombia and Zambia are the world’s three largest emerald exporters. Brazil’s aggregate tax on revenues is 2% (in the form of mineral royalty) and Colombia’s aggregate tax on revenues is 2.5% (being a 1.5% mineral royalty and a 1% national emerald fund contribution) in addition to corporation taxes of 34% and 33% respectively.”
“In 2023, when no export duty was in place, Kagem 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 duty was originally introduced at the start of 2019 by the previous Zambian government and after considerable effort by the Zambian emerald sector, the export duty was suspended at the end of 2019 and ceased to apply from 1 January 2020.”
Gemfields 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.”
Zambia Reinstates 15% Export Duty on Emeralds Despite Industry Concerns
SAT Reporter – Southern African Times
January 8, 2025 –
Zambia has reinstated a 15% export duty on emeralds, effective 1 January 2025, reversing its 2019 suspension of the levy. The reintroduction aims to bolster government revenue from the gemstone sector, a significant contributor to the nation’s economy.
The 15% export duty was initially imposed in January 2019 to increase state earnings from the mining industry. However, it faced criticism for potentially deterring investment and hindering the competitiveness of Zambian emeralds in the global market. In response, the government suspended the duty in January 2020 to stimulate growth and attract foreign investment in the gemstone sector.
Gemfields, a leading producer of coloured gemstones and operator of the Kagem emerald mine in Zambia, has expressed concern over the duty’s reinstatement. The company, which owns 75% of Kagem in partnership with the Zambian government holding the remaining 25%, fears that the renewed levy could adversely affect the industry’s sustainability and its appeal to investors. In 2023, Kagem contributed approximately 31% of its revenue to the Zambian government through mineral royalties, corporation tax, and dividends. Between 2009 and 2023, the mine reported cumulative emerald sales revenue of $1.1 billion.
Gemfields asks Zambia to Reverse Emerald Export Tax
According to Reuters, Gemfields has asked the Zambian government to remove the recently re-introduced 15% export tax.
The Kagem mine has reported cumulative emerald sales revenue of $1.1 billion between 2009 and 2023, according to Gemfields.
Creamer Media’s Mining Weekly offers emerald industry background:
Compared to Zambia, Gemfields pointed out that Brazil’s aggregate tax on revenues was 2% (in the form of mineral royalty) and Colombia’s aggregate tax on revenues was 2.5% (being a 1.5% mineral royalty and a 1% national emerald fund contribution) in addition to corporation taxes of 34% and 33%, respectively.
In 2023, when no export duty was in place, Kagem paid an effective 31% of its revenues to the Zambian government in the form of mineral royalty, corporation tax and dividends. 
Image courtesy of Gemfields
