Gemstone miner Kagem Mining has reinforced the Zambian government’s optimistic outlook for the future of Zambia’s gemstone and wider mining sector.

Kagem on January 7 hosted Mines and Minerals Development Minister Paul C Kabuswe at its mine site in Lufwanyama as he toured the gemstone-rich district to gain a better understanding of the operations and activities in the area.

The Kagem emerald mine is 75%-owned by London-listed Gemfields, in partnership with the Zambian government’s Industrial Development Corporation (IDC), which owns 25%.

Kabuswe noted that now more than ever – and in light of the Covid-19 pandemic – government was determined to provide the necessary leadership, structures and policies that would see the mining sector thrive.

He stressed the need for transparency in the sector, a view Kagem and parent company, Gemfields, say they share, as they say this is critical in ensuring that the correct information is relayed to stakeholders and for the country to benefit from the sector.

“The gemstone industry in Zambia has a future and I am excited about that. I am so excited about Kagem because government has a share in it. Our focus as government is to have organised mining all over; be it in the copper, manganese or gemstone industry. All we need to do is to organise and provide leadership, transparency, integrity and government and the people will get what is due to us.

"From the path that especially Kagem Mining has shown us, I think we are going in a positive direction and Zambians are going to benefit from these mines,” said Kabuswe.

The Minister also acknowledged the mine’s response to and handling of the Covid-19 pandemic.

Kagem was significantly affected, with a suspension on operations in place for a year from March 2020. However, Kagem Mining notes that the mine protected the jobs of every employee, continued to provide salaries and sheltered employees from redundancy despite negligible revenue and zero productivity.

Kagem restarted operations in March 2021 and reached full capacity in May 2021.

“What happened at Kagem was very unique; despite the mine closing its operations, it kept employees paid for the whole period of 2020. We are the only gemstone company that did that, despite not producing and only operating on expenditure which was provided for by the mine’s parent company and main shareholder – Gemfields,” said Kagem chairperson Dr Sixtus Mulenga.

He noted that the mine had shown resilience and was expected to announce a profit for 2021 as well as declaring dividends later in the year.

Kagem has a projected life-of-mine of 25 years and is the largest contributor of taxes to government in the gemstone sector, having pioneered a new level of transparency across its auction and sales process.

This system allows government officials to oversee the entire sales process and observe the full sales value being repatriated to Zambia, ensuring that all due taxes are paid in full, the company noted.

Mulenga also commended government on its positive stance on investment in the country. “The New Dawn government is the most business-friendly government we have had in a long time in Zambia. They have declared a tax regime which is predictable and investor-friendly, and we are delighted as investors to work with such a government.”