Gemfields to meet Govt. in bid to save hundreds of jobs

FAILURE to extract a change of heart from the Zambian government this week over a controversial export duty on emeralds could result in hundreds of retrenchments, said Sean Gilbertson, CEO of the London- and Johannesburg-listed Gemfields Group.Employees of Kagem, the firm’s emerald mine, are currently on forced leave for six months after the firm in December suspended production. It said at the time prospects for emeralds were poor for the first half of this year after a competitor flooded market, depressing prices.Then on December 30, the Zambian government gave notice it would reimpose a 15% export duty on gemstones (effective January 2) that, combined with an existing 6% mineral royalty tax, takes 21% out of revenue. Zambia also has corporation tax levied at 30% of profits.Gilbertson said the export levy would force the company’s hand. “The reality is that if we are not able to get the 15% export duty dealt with soon we will regrettably have to make a number of redundancies in order to shield the survival of the business,” he said.It was also possible that Kagem’s suspension could be extended to beyond six months. “There is no point restarting a mine that is fundamentally unsustainable,” he said. Kagem is currently processing 18 months worth of stockpiled ore.“There is a lot of industry dialogue happening at the moment between sector participants, including ourselves, and also our principle competitor, Grizzly Mining,” said Gilbertson. “With them, we are making representations to the Government in Lusaka this week to get that resolved.”There is some good news insofar as the firm’s Montepuez ruby mine in Mozambique has restarted production following violent protests in December. Two people were killed as protestors rampaged through the settlement. The protests were related to the unpopular re-election of Frelimo presidential incumbent, David Chapo, who was inaugurated on January 15.“We’re back on line,” said Gilbertson. “After December 24 the team did a super job to get on site in about 72 to 96 hours. But then got 100mm of rain on single day at one section soon after, but by mid-January, we are up and running.”“The inauguration seems to have been relatively peaceful.”Gemfields Group is tripling the capacity of the plant at Montepuez which Gilbertson said ought to be completed by June. Following planned troubled-shooting the increased processing capacity would enable Gemfields to hold a large ruby auction in November or December, he said.The post Gemfields to meet Govt. in bid to save hundreds of jobs appeared first on Miningmx.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com