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GEMFIELDS SET TO PROMOTE TRANSPARENCY


By SANFROSSA MANYINDA
IN a bid to promote greater transparency regarding the level of natural resource wealth shared with the governments of host countries, Gemfields is inviting governance bodies, mining organizations, industry observers and host governments to adopt the G-Factor for Natural Resources.

Gemfields operates the Kagem emerald mine in Lufwanyama district.
Kagem and Gemfields CEO Sean Gilbertson said the G-Factor for Natural Resources was intended to be an uncomplicated indicator of the percentage of a natural resource company’s revenue that is paid to the host country’s government in primary and direct taxes.


Mr Gilbertson said the G-Factor for Natural Resources was expressed as a percentage and was calculated by adding together mineral royalty tax, corporation tax and dividends paid by the reporting company to the host government.
He said the total paid was then divided by the revenue of the company during the relevant period.


“The G-Factor for Natural Resources takes its name from the “g’s” in “government”, “governance” and “good practice”, with a passing nod to “Gemfields. It could be calculated by each company engaged primarily in the extraction and sale of natural resources, whether in the mining, oil, gas, timber or fishing sectors, amongst others.
” Accordingly, multi-national natural resource companies would publish the G-Factor for Natural Resources for each operating subsidiary engaged in the extraction and sale of natural resources,” he said.


Mr Gilbertson added that Gemfields recognised that no measure of this type was perfect and explained the G-Factor for Natural Resources was a “rule-of-thumb” that has broad application but was not suited to every situation.
He said there were numerous additional and indirect taxes that are not included in the G-Factor for Natural Resources, but which further increase the contribution made to host nations by natural resource companies.


He added that such taxes include area/surface charges, social security contributions, taxation on the salaries of employees, import and export duties and VAT.
The G-Factor for Natural Resources computations for Kagem emerald mine in Zambia, which is 75% owned by Gemfields and 25% by the Zambian Government.

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