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Tuesday, 8 November 2011

A lost precious stones industry, 2nd Edition

Minister of Mines Wilbur Simuusa last week suggested that Zambia has the capacity to earn about US$700 million from the precious stones market. That dwarfs any amount being collected currently from copper mining. In his words, "The gemstone sector can contribute about US$700 million if properly managed…Government will ensure that sanity is brought in the sector...We want to put the sector in motion. Firstly, there is need to revive the semi precious and precious stones association to boost growth of the sector..". For further discussion of the current problems facing the precious stones industry, see the first edition. 


  1. Indeed Zambia can reap $700m from gems

    But the main players in the gemstone sector such as Gemfields which operates the Kagem mine wont be willing to lose huge profits and transfer pricing mechanisms
    To be aware of this potential, do not read the kagem accounts which are held down by investments and transfer pricing - Id’ be curious to know how much money Gemfields gave to the Zambian state (dividends or tax)- but read RNS from plunderers to its shareholders

    Gemfields owns 75 % kagem, the state 25%
    Read the Kagem’s key annual production (page 3) and gemfileds sales (page 4)and you will understand
    Cash cost collapsed, production raises,…
    Read comments of management
    "Kagem has delivered a phenomenal quarter in terms of sales and enjoyed another robust production quarter,” chief executive Ian Harebottle said.

    “We are very fortunate. Without a doubt we have the world’s single largest producing emerald deposit in Kagem.
    In a recent interview with Proactive Investors, chief executive Ian Harebottle revealed the company’s plans to go underground at Kagem. And having compiled an initial feasibility study, it is now developing a mine plan.

    Drilling is also underway on the site, with an updated resource statement expected by the end of the year.

    “There are at least six known deposits on our area, but we want to move our open-cast feet to the right one,” Harebottle said.

    “If we can do that in a couple of years we will have an opencast pit and an underground mine. And that is where we are looking to go at Kagem in the not too distant future.”
    The Kagem mine is shrewdly touted as the home of the ethically produced, carbon neutral and ecologically “green” emerald. However the Kagem name is also synonymous with quality in the market.

  2. Gemfields wants to raise stake in Kariba to benefit from gems rather zambians

    plunders must be stopped and plunderers must be brought to heel
    In Simuusa we trust...


    Gemfields also wants to invest in the Kariba amethyst mine, its other Zambian asset, but not before it has acquired a controlling interest in the project.

    Harebottle said: “We are in talks with the government to buy an additional 25 per cent stake in this mine so we can have 75 per cent and justify increasing our level of investment into this project.

    “(Kariba) needs a bit more cash, which we are happy to supply, but we want a bit more influence over the cash in order to justify that.

    The market and the demand (for amethyst) is picking up which is exciting.”

    “In Kariba we have the world’s single greatest producing amethyst deposit. And I have every confidence we will soon have the world’s largest single ruby deposit up and operational. They are great rubies.”
    The market for gemstones, meanwhile, goes from strength to strength.

    Demand from China and India is driving the market, while the US is slowly emerging from recession and starting to spend.

  3. MikeTe,

    Thank you very much for these excellent sources! It is clear that Gemfields is poised to deliver massive profits from Zambian gems to their investors in coming years. I notice that they are quite proud of their increased security precautions, including X-ray machines (which if repeatedly used on humans can present a long term health risk). Such measures are fairly standard in the gem industry however, so I wouldn't want to portray Gemfields as somehow unique in this respect, but it does occur to me that if these mechanisms are good enough for the company to keep track of gems coming out of the mine, then the government monitors should be right there beside them and privy to exactly the same information at the same time. With the profits they are showing, the company should have no difficulty supporting any additional costs related to parallel government monitoring of their extraction activities. Of course the monitors themselves must also act in an upright fashion and not succumb to corruption, but hopefully both issues can be tackled simultaneously in the overall reorganisation of the sector.

    Again, thanks for bringing these facts into the light MikeTe!

  4. This GEMSTONES story, always talking about potential potential potential all the time.
    Why not move in the sector to restore sanity if ZAMBIA can earn that kind of money.
    Apply the same vigor that you exhibit when collected PAYE from poor (mostly poor0 Zambians.

  5. and the looting continues...


    ‘No benefit from semi-precious stones’
    June 12, 2012 | Filed under: Business | Posted by: web editor

    THE Gemstone Processing and Lapidary Training Centre (GPLTC) says in spite of the seemingly lucrative gemstone industry in Zambia, the country has not benefited from the semi-precious stones.
    This is due to illegal mining and export of unprocessed gemstones, which do not fetch good price on the international market, as compared to cut and polished products.
    GPLTC director William Mumbi says erratic and uncontrolled sale of gemstones and lack of accountability are among many challenges being faced in the development of the semi-precious stone industry.
    Mr Mumbi says GPLTC has a task of spearheading the evolution of Zambia’s gemstone business, from being a source of rough gemstones, to a leading downstream gemstone processing centre in the Southern African Development Community (SADC) region.
    GPLTC was established as the vehicle to address the main challenges facing the country of bringing about sustained improvements in the livelihoods of the majority of the population living in poverty, through skills that will facilitate value addition to the country’s gemstones.
    Mr Mumbi said in response to a Daily Mail query in Ndola yesterday that GPLTC is the first of its kind in the SADC region.
    He said the lapidary training centre provides appropriate skills that should facilitate the sale and export of processed gemstones, resulting in the strengthening of the economy in terms of increased revenue from gemstones, international competitiveness, employment generation and poverty alleviation.
    “In order to hasten this evolution, the lapidary centre aims to train a large number of entrepreneurs both from the small and medium-scale mining sector, women, youths and school-leavers,” he said.
    Mr Mumbi said Government’s future plans include developing the lapidary training centre into a “Centre of Excellency” in the SADC region, in order to attract students from neighbouring countries that produce gemstones, such as Botswana, Tanzania, Angola, Democratic Republic of Congo, Mozambique and many other states.
    The centre focuses on establishing job and task-oriented training programmes, efficiency of vocational training delivery, institutional strengthening and linking training with production, and the labour market.
    Mr Mumbi cited India as one of the countries that have created employment of over 70,000 gemstone cutters and polishers in the streets of Jaipur, although the country heavily depends on mineral raw materials from countries like Tanzania and Zambia.
    He said to ensure the success of this industry, India has implemented very stringent laws and regulations that encourage the importation of rough gemstones and export of finished gemstones, and discourage export of rough gemstones.


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