By BUUMBA CHIMBULU
GEMFIELDS, the owner of Kagem Mining Limited, has reported a growth in revenue of US$216.2 million in 2019 from US$206.1 million the previous year.
This follows six successful auctions of emeralds from Zambia and rubies from Mozambique.
Overall production in 2019 amounted to 36.3 million carats at an average grade of 228 carats per tonne.
Kagem Mining Limited is 25 per cent owned by the Industrial Development Corporation (IDC) and 75 per cent by Gemfields.
The mining company contributed close to US$80 million of Gemfields overall revenue.
Kagem emerald mine continued its run of robust growth throughout 2019, adding that the total rock handling at the mine increased to 12.6 million tonnes from 11.9 million tonnes in 2018.
Gemfields Chief Executive Officer, Sean Gilbertson, said 2019 was a fruitful year for the wider group when compared with 2018.
He however added that 2020 would be particularly challenging due to the Coronavirus (Covid-19) global pandemic.
Mr Gilbertson explained that widespread travel and freedom-of-movement restrictions during the outbreak had put gemstone auctions on hold for an unknown period.
In 2019, some 93 per cent of Gemfields’ overall revenues were derived from the six auctions it hosted.
He noted that Kagem’s depleted cash balance – combined with the inability to generate revenue by hosting auctions – would leave the emerald mine reliant on fresh funding from Gemfields for the foreseeable future.
However, the extension of the Kagem emerald mining licence for a further 25 years until April 2045 and the suspension of the 15 per cent export duty for precious coloured gemstones in Zambia, effective from January 1, 2020, were significant positive milestones.
“While there were many positives during 2019 and it was a good year for Gemfields, the new year has already presented notable challenges including the turmoil triggered by Covid-19.
“The fallout from Covid-19 will have a material adverse impact on our operating and financial performance in 2020,” Mr Gilbertson observed.
He said that the group was on a sound footing and that, provided gemstone auctions could be resumed within a reasonable timeframe, the challenges presented by the Covid-19 pandemic could be navigated.
Mr Gilbertson also drew attention to the historic resilience of coloured gemstones during times of market volatility.
By BUUMBA CHIMBULU