Gemstone miner Gemfields is asking the Zambian government to withdraw a recently reinstated 15 per cent export duty on Zambian emeralds.

The company said it was made aware that the tax, deferred in end-2019, had been reinstated as stipulated in a new Zambian legislation effective January 1, 2025. This essentially revoked the 2019 suspension.

“The company will engage with the Zambian government to seek the re-introduction of the suspension of this export duty or to remove it from the legislation given the impact on sector sustainability and investment attractiveness,” noted Gemfields. “The company will keep the market informed of further development.”

The government’s decision to re-introduce the export duty directly impacts Zambian emeralds mined by Kagem Mining Ltd, where Gemfields is a majority stakeholder. The Zambian government’s Industrial Development Corp owns the remaining 25 per cent.

This duty is on top of an existing 6 per cent mineral royalty tax, which means that Kagem faces an effective tax on revenues of 21 per cent, in addition to corporation tax of 30 per cent. 

Zambia alongside Brazil and Colombia are the world’s three largest emerald exporters. According to Gemfields, Brazil’s aggregate tax on revenues is 2 per cent while Colombia’s aggregate tax on revenues is 2.5 per cent in addition to corporation taxes of 34 per cent and 33 per cent, respectively.

“In 2023, when no export duty was in place, Kagem paid an effective 31 per cent of its revenues to the Government of the Republic of Zambia in the form of mineral royalty, corporation tax and dividends,” revealed Gemfields.

Gemfields added that there was no notice or prior consultation regarding the re-introduction of the export duty.