Kagem Mining Limited has welcomed the Zambian Government’s decision to suspend the 15% export tax on gemstones in order to support capital investment and the growth experienced by the sector over the last decade, thereby boosting export earnings.
This move will create a business environment which is conducive to further investment and growth in Zambia’s gemstone sector, levelling the playing field vis-a-vis competing countries such as Colombia and Brazil.
Zambia, which saw its attractiveness as an investment destination for gemstone miners marred by the 15% export duty, will therefore now retain its position as the most formidable player in the world of emerald mining.
Kagem chairman Dr Sixtus Mulenga, commending the Government’s proactive decision and its support for the gemstone industry said: “The decision to suspend export tax will have a significant impact on the growth of the sector, in turn contributing to employment and the economic multiplier effects that this brings, along with the overall enhanced tax revenue that will be derived for years to come.”
Dr Mulenga also thanked the management of Grizzly Mining for their collaborative effort during discussions with the Government.
Kagem is confident that the suspension of the export duty is a positive step for the industry, which is still in its infancy and requires significant further investment to unlock its full production potential.
“Thanks to this positive action by the Government, Zambia’s gemstone sector will regain its competitive edge in the international market, helping to stimulate investment and growth, thereby supporting exports and generating more foreign exchange earnings for the country” said CV Suresh, Managing Director for Zambia at Gemfields, which owns 75% of the Kagem emerald mine in Lufwanyama in partnership with the Zambian Government through the Industrial Development Corporation (IDC), which owns 25%.
“An increase in demand for emeralds, coupled with a well-established marketing programme and a reliable source of supply from Zambia, will result in increased revenue that will attract more foreign earnings and tax for the country,” he added. “Kagem, as the most successful and transparent emerald mining company in Zambia’s history, will now be sustainable and enabled to pay further dividends to its shareholders, which include IDC of Zambia, thereby contributing to the country’s growth and prosperity”.
Mr Suresh further noted that the Government’s open and collaborative policy on dialogue relating to the challenges currently affecting the mining sector bodes well for the growth of the industry.
Kagem is 75% owned by Gemfields and 25% by the Industrial Development Corporation of Zambia. Proceeds from its regularly held auctions, which are held locally and abroad, are fully repatriated to Zambia, with all royalties due to the Government being paid on the full sales price achieved at an auction.
Gemfields’ 34 auctions of emeralds and beryl mined at Kagem since July 2009 have generated USD 635 million in total revenues. To date, Kagem has contributed approximately USD 120 million to the Zambian government in cumulative corporation taxes, mineral royalties and dividends.
This means that, without taking into account indirect taxes such as tax on employee salaries, almost 20 percent of Kagem’s revenues have flowed to the Zambian government in the last decade.
When the BBC reported this story 2 days ago, they mentioned diamonds.
Do we have diamonds in Zambia? Who is mining these?
Maybe Lungu and Chitotela are keeping this quiet?
Can someone please shed some light on this?
Total chaos. Clearly we dont know what we are doing. So many tax regimes introduced then suspended then reintroduced then re-suspended. Is there anyone in PF that has competence to calculate taxation?
Please guys this is becoming embarrassing. The minong companies are increasingly going yo be bold to resist any policy that government may try to implement for the benefit of the people becausr they will know that we have a bunch of bafoons running the snow and they havent got thr slightest clue what they are doing.
Economists and expats please help us,how does this tax suspension benefit our economy?Someone with a technical know-how on this please elaborate.
GRZ/PF, must deal with the whole mining sector taxation as opposed to PIECE – meal APPROACH, (which may appear to be driven by corruption,) will not help ZAMBIA deal with problems of MASSIVE UNEMPLOYMENT. AND POOR ECONOMY.
OPTING for CANNABIS may not be the only option to grow the economy.
The mining taxation, for example on manganese has made it unprofitable to MINE, People have abandoned it.
Similarly- Copper mining sector is not attracting the desired investment and growth – NO EMPLOYMENT is being created -( GIVEN THAT MINING IS THE POTENTIALLY LARGEST EMPLOYMENT CREATOR).
I CHALLENGE THE ministry of mines and related organization to conduct a comprehensive study and advise GRZ on the benefits of REDUCED taxation across the BOARD for the mining sector.
Kadgem contributed Only 20% of earnings to GRZ while top individual earners contribute 40 % of their earnings ????
The biggest tax evader in Zambia is grizzly mining. Those Senegalese are also the biggest contributers to PF and lungus campains.
These gemstones are a non renewable source of income and what more these mining companies make millions of dollars selling them abroad whilst leaving big gaping holes in the ground. This tax should not be removed.
Hey Folk just relax. At least let’s acknowledge that Government through this decision corrected a wrong, which in turn will contribute to eroded investor confidence, enhance production and save jobs. For those of you who are clueless about business development, upstream/downstream benefits, please hold your horses and think before you comment. Businesses are the backbone of the economy and thus provide for revenue to Government, provide for employment opportunities so that you can be employed, pay taxes, etc, which further enhances revenue to Government coffers. The 15% export duty simply played into the hands of our competitors, thus making Zambian emeralds and other gemstones that much more expensive, thus benefiting the sales of our competitors and resulting in reduced revenue to…
The Senegalese, 99% of them illegally here in Zambia, and unscrupolous greedy Indians are a cancer on Zambia’s emerald industry, depriving Zambians over $1billion in the past decades. What if the roles were reversed; would the Senegalese tolerate Zambians depriving them of the wealth owing to Zambians or would they slit our throats; the Indians are no different ; just to be a black Indian can spell the end of your life let alone if you were profiting from their precious minerals. Zambians must reclaim their God giv3n minerals and send these foreigners packing