Gemfields Group Limited (AIM:GEM), down 5% in Wednesday’s early deals, told investors it intends to engage with the Zambian authorities after a 15% export duty on emeralds was levied by the government.
Effective 1 January, the export duty was reintroduced adding to a 6% mineral royalty tax, effectively bringing the effective tax rate to 21%, Gemfields noted.
It compares to rates of only 2% and 2.5% in Brazil and Colombia, the world’s two other major emerald exporters.
Gemfield’s Kagem Mining subsidiary is 75% owned by the company, with the other 25% held by Zambia’s state-backed Industrial Development Corporation.
The London-listed firm noted that in 2023, when no export duty was in place, Kagem saw some 31% of its revenue paid out through mineral royalties, corporation tax, and dividends.
It said it now intends to engage with the Zambian authorities over the matter, to advocate for either the removal or re-suspension of the export duty.
"Gemfields notes that there was no notice or prior consultation regarding the re-introduction of the 15% export duty. Gemfields understands that several additional measures have also been introduced in other areas of the Zambian economy to enhance Zambian Government revenues in 2025," the emerald producer stated.
Zambia first brought in the export duty in 2019 before scrapping it in 2020.
In London, Gemfields shares were down 5% to 6.65p.