GEMFIELDS Plc estimates a 46 per cent fall in full-year auction revenue after it delayed its rough emeralds auction by a month following a directive by the Zambian government.
The government issued a directive in April that all auctioning of emeralds mined in the country be held in Zambia as their sale in foreign markets results in capital flight.
Gemfields, which operates the Kagem emerald mine in Zambia, yesterday said it had now been asked to hold the auction of higher grade rough emeralds in Zambia from July 15 to 19, instead of Singapore where it was originally scheduled to take place from June 10-14.
As a result of the delay in holding the auction, the Zambia precious stones miner said it would have completed only two auctions in the financial year ending June 30, generating aggregate auction revenues for the year of US$42 million.
“In the prior financial year (30 June 2012), four auctions were held, generating aggregate auction revenues of $77.9 million,” the company said in an emailed statement.
“Kagem’s revenues generated by auctions will therefore decline 46 per cent year-on-year as the next auction will take place in the new financial year commencing 1 July 2013.”
Mines deputy minister Richard Musukwa last week said there was no ban on the auctioning of emeralds outside the country.
But Gemfields chief executive Ian Harebottle said: “While we have received repeated assurances that there is no ban on overseas auctions, we have been asked by the Ministry of Mines to host an auction of higher grade emeralds within Zambia as part of a consultative process