New Zambian emerald auctioning directive sends Gemfields’ shares down 19% on LSE

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emerald

Precious stones miner Gemfields Plc said the Zambian government could curb its ability to sell gemstones outside the country, potentially hurting revenue at its core Kagem emerald mine in north Zambia.

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The Zambian Ministry of Mines, Energy and Water Development directed on Friday that all auctioning of emeralds be held in Zambia as their sale in foreign markets contributes to capital flight, Gemfields said in a statement.

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Output from Kagem has been sold solely outside the country since 2009, generating $160 million of revenue from 11 auctions abroad.

Gemfields, which named actress Mila Kunis its brand ambassador earlier this month, mainly mines emeralds at its 75-percent-owned Kagem mine, but also has interests in ruby and sapphire deposits.

The potential ban would also affect Gemfield’s Kariba amethyst mine in south Zambia, in which the company has a 50 percent stake, it said.

Gemfields’ shares were down 19 percent at 23 pence at 0728 GMT on the London Stock Exchange on Monday.

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