Zambia Will Consider Allowing Offshore Emerald Auctions

Zambia will allow emeralds mined in the country to be auctioned abroad if companies wishing to do so justify the move, the minister of mines said.

Gemfields Plc (GEM)’s auction last week in Lusaka, the capital, was the company’s most successful sale to date, proving the country as a viable destination, Christopher Yaluma told reporters today.

Yaluma’s predecessor Yamfwa Mukanga in April said the government wanted all emerald auctions to take place in the country. The move would “materially constrain” revenue from Gemfields’ Kagem mine, the world’s biggest single source of the gems, the company said at the time. The government has since held talks with the company, which both sides described as positive.

The company’s shares rose as much as 7.3 percent and were trading 4.9 percent higher at 21.5 pence by 2:54 p.m. in London.

“I’m not going to say I’m rigid” on auctions being held outside Zambia, Yaluma said. “If they come tomorrow and they give us solid reasons as to why it should go out, we are not going to be rigid.”

Gemfields’ Lusaka auction of higher-grade emeralds that closed on July 19 generated sales of $31.5 million, and the highest price by weight the company has achieved, it said in a statement to the Regulatory News Service. All stones offered were sold for the first time at the auction, Chief Executive Officer Ian Harebottle said in an interview on July 19.

To contact the reporter on this story: Matthew Hill in Lusaka at mhill58@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

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