Zambia will suspend a 15% export tax on gemstones, excluding diamonds, from Jan. 1 next year as the levy, aimed at raising more revenues ended up affecting the country’s output.
The news was welcomed by Gemfields (JSE: GML), which runs Kagem, the world’s largest emerald mine in the Copperbelt province of Zambia.
Mining accounts for more than 70% of Zambia’s foreign exchange earnings.
The company has had to pay 21% in taxes for its shipments from the African country this year, as its gemstones were also subject to a long-standing 6% mineral royalty. That compares with only 2.5% and 2% producers pay in large-emerald exporting countries Colombia and Brazil, respectively, Gemfields said.
The duty hit small-scale gemstones miners the hardest, as they
were unable to attract significant investment this year.
Mining accounts for more than 70% of the southern African
nation’s foreign exchange earnings.
Gemfields is the operator and 75% owner of the Kagem and
Montepuez ruby mine, which is located in Mozambique.
It also holds controlling interests in various other
gemstone mining and prospecting licences in Zambia, Mozambique, Ethiopia and
Madagascar.