Kagem Mining Limited has delivered a USD 5 million dividend to the Zambian government’s Industrial Development Corporation (IDC) Limited, which owns 25% of the emerald mining company in Lufwanyama.
Kagem delivers the dividend for the second consecutive year, which are the first dividends delivered since 2016. This dividend is in addition to the USD 11.5 million mineral royalty tax paid on the sale of emeralds at auction during 2022 and the USD 13.3 million corporation tax payable for the year ended 31 December 2022.
“Kagem’s Zambian emeralds continue to attract a worldwide market, and it is this value that has enabled Kagem to pay this dividend for 2022. Our strategy of being a world-leading responsible miner and marketer of coloured gemstones is working and is generating considerable revenue and benefits for our host governments and the communities we operate in,” said Kagem Board Chair, Dr Sixtus C Mulenga.
IDC Investments Committee Chairperson and Director on the Board, Beatrice Nkanza commended Kagem on the development saying: “We are extremely pleased that Kagem has declared dividend to its shareholders on the back of the strong financial performance. Of this dividend, the Zambian government through the IDC has received USD 5 million, commensurate to our shareholding. It is our expectation that Kagem continues on this growth trajectory and continue to contribute to the growth of the Zambian economy.”
The Minister of Mines and Mineral Development, Honourable Paul Kabuswe who graced the occasion reiterated government’s desire to realize a thriving and long-lasting mining industry that through mutual and beneficial stakeholder partnerships would deliver value on investments: “Government is not in this alone. Our partner is the private sector, and this dividend being presented by Kagem demonstrates the company’s dedication to meeting us half way by fulfilling its obligations and contributing to the sector’s economy.”
Kagem Mining has also spent USD 3 million to December 2022 on its social development programme across health, education and livelihoods. This includes the upgrading of a clinic to hospital status, local farming skills training, funding of university undergraduate degree scholarships in Geology and Mining Engineering, the construction of Chapula Secondary School, and more recently the expansion of Masasa primary school and upgrading of Kapila primary school. Kagem also has plans in place to create a vocational skills training centre in the near future.
Kagem conducted four emerald auctions in 2022, with some auctions setting new records including the highest revenue received, and the highest average price per carat achieved at any Kagem auction.
The November auction saw the sale of Kagem’s outstanding 37kg Kafubu Cluster, setting a new record as the most expensive single emerald item ever sold by Gemfields. Kagem was also able to supplement its 2022 revenues via its direct sales programme for commercial quality gemstones in India.
Kagem’s 2022 auction revenues set a new annual record of USD 149.4 million, beating the prior record – set in 2021 – of USD 92.3 million, making 2022 the best calendar year performance since Gemfields acquired the mine more than a decade ago in a model partnership with the government.
Kagem attributed the achievement to the hardworking team and Kagem’s 25% shareholder, the Government of the Republic of Zambia.
Dr Mulenga further noted further noted that Gemfields and Kagem’s strategy of marketing Zambian emeralds on the international stage over the years, as well as its ability to adapt to ever-changing market circumstances, such as the introduction of the “online bidding” auction format, has provided greater flexibility in conducting its business.
“2022 has been a remarkable year for Gemfields Group Limited, with a dramatic recovery as we returned to normality after the Covid-19 pandemic. I would like to take the opportunity to thank Gemfields Group and our stakeholders for the resilience shown across the past few years.” said Gemfields Chief Executive Officer, Sean Gilbertson.
Source: Langmead & Baker Ltd