Gemfields reported recently that its auction of higher quality rough emeralds held in Singapore from November 18‐21, 2019 fetched total revenue of US$ 27.2 million at an average price of US$ 85.26 per carat, an all-time record for the company.

The emeralds were extracted by Kagem Mining Ltd in Zambia, which is 75% owned by Gemfields and 25% by the Industrial Development Corporation of Zambia.

Bids were placed by a record number of 48 companies and of the total 38 lots on offer, 33 (or 87%) were sold, while of the 0.36 mn cts on offer, 0.32 mn cts (88%) were sold.

To date, the 34 Kagem auctions held since July 2009 have generated US$ 635 million in total revenue.

Adrian Banks, Gemfields’ Managing Director of Product & Sales, commented: “Kagem has realised US$ 79 million of auction revenues in 2019, the second‐best calendar year performance since the auction system was introduced a decade ago. The recovery being experienced by our auction customers therefore appears to have solid foundations, as is further evidenced by the 48 companies placing bids, a record for any Gemfields emerald auction. While the auction’s overall price‐per‐carat was also a record, each auction has a slightly different composition and should not be directly compared.” 

He added that though the mining and sales performance was robust, “the Kagem team’s sterling efforts are unlikely to be rewarded”. Banks pointed out that auction revenues of US$ 79 million are poised to suffer both 15% export duty and 6% mineral royalty tax, totalling US$ 17 million. The 6% mineral royalty tax itself is then again taxed at the corporation tax rate of 30%, as are Kagem’s profits. “The effective tax rate is therefore crippling for any business”, he pointed out. 

Gemfields reported that in addition to its stalwart clients from India, Caibaocheng of China and Gemstar of Israel both won three lots of fine quality Zambian emeralds.