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10 April 2013 | Adam Leach
The Zambian government is directing mining firms not to auction any emeralds extracted in the country in foreign markets to increase the value to the domestic economy.
In a statement this month, the Ministry of Mines, Energy and Water Development announced all auctions of the precious stones should be held in Zambia. This, it proposed, would give its people a “fair share” of the value of the precious resources, stimulate local demand, and create employment.
The government explained the auction for stones from the Kagem mine in the north of the country, which is 25 per cent government-owned, would be held in mid-April. Gemfields, which owns the remaining 75 per cent stake, confirmed this, but warned the move would put Zambian stones at a disadvantage.
In an update to shareholders, the mining company - whose jewellery is worn by the actress Mila Kunis - said: “Gemfields believes that any outright limitation on selling emeralds in other countries could have the potential to materially constrain Kagem’s revenues as the broader development of the Zambian gemstone sector across the globe. Such a limitation would place Zambian emeralds at a disadvantage relative to other emerald-producing countries where no such limitations are in place.”
The move by the government follows calls from Zambian president Michael Sata for the auctioning of all gemstones - not just emeralds - to be held within the country. While the department specified this already applies to emeralds, it revealed it is currently working on a broader policy.
Yamfwa Mukanga, minister of mines, energy and water development, said: “The government is currently working out mechanisms to ensure that all gemstones are sold within the country in a manner that will ensure maximum benefits for the country. Mining companies in the gemstone sector are urged to abide by the government’s directive to auction gemstones within the country.”
Last month, a report by the Economic Commission for Africa and the African Union Commission called for commodities to be put at the heart of Africa's industrial strategy. The report argued that while the continent is already reaping benefits from prized raw material through the export market, it could obtain greater value by building supply chains around them and adding value to them within the countries of origin.