Gemfields Plc, the majority owners of Kagem Mines has charged that the intention to ban the sale of gemstones outside of Zambia is potentially detrimental to the country’s gemstone sector.

In a notice to shareholders posted on the London Stock Exchange website, Gemfields says the possible ban by the Zambian government on the Company’s ability to sell its gemstones outside of the country is potentially detrimental to the Zambian gemstone sector.

Gemfields says the ban would prevent it from being able to freely sell its gemstones in the markets where it believes it would realise the best prices.

Gemfields’ principal asset, the Kagem emerald mine in Lufwanyama which it owns 75 percent shares is the single largest emerald mine in the world.

Gemfields also owns 50% of the Kariba amethyst mine in Siavonga, with GRZ owning the other 50%.

At a press conference in Lusaka on Friday 5 April 2013, the Minister of Mines, Energy and Water Development addressed members of the media and distributed a press statement seemingly restraining Kagem and other producers from selling emeralds outside of Zambia.

Since 2009, Kagem’s production has been sold only outside of Zambia, generating USD 160 million of revenue from 11 auctions.

Representatives of GRZ have routinely attended those auctions.

Gemfields says the pronouncement by President Sata that all gemstones should be sold within Zambia if confirmed, would similarly affect the Kariba amethyst mine in which Gemfields has a 50% interest.

It said any outright limitation on selling emeralds in other countries could have the potential to materially constrain Kagem’s revenues as well as the broader development of the Zambian gemstone sector across the globe.

The company said such a limitation would place Zambian emeralds at a disadvantage relative to other emerald producing countries where no such limitations are in place.

Gemfields stated that given earlier verbal requests by the Ministry of Mines, Gemfields and Kagem had agreed to include Zambia as one of the destinations on its 2013 international auction circuit.

It added that accordingly, Gemfields and Kagem will host an auction in Lusaka from 15-19 April 2013 and thereafter, Gemfields’ next auction is presently scheduled to take place in Singapore in June 2013.

The company said it has yet participated in or been invited to any industry or stakeholder consultation process regarding these measures.

The company has since written to the Ministry of Mines requesting clarification of the terms, conditions and basis of the measures.

It added, “The press statement by the Minister of Mines suggests that the sale of Zambian gemstones on foreign markets has contributed to capital flight. Gemfields takes particular pride in the repatriation of Kagem’s auction proceeds to Zambia and in keeping all relevant government departments fully updated in this respect. Gemfields and Kagem set the benchmark for transparency in the sector, publishing detailed auction information including the revenue received for each of its auctions, as well as all of its gemstone production data, including unit costs, on a quarterly basis.”

And Gemfields CEO Ian Harebottle said these developments potentially endanger the health of the sector immediately after they have begun to deliver meaningful positive results on behalf of stakeholders.

“The record shows that Kagem’s financial and operating performance has never been better. The combination of our investments in the mine, our auction practices, proprietary emerald grading system and global marketing campaigns have delivered dramatic results not only for Kagem, but for the wider Zambian gemstone sector. Kagem’s repatriation of foreign currencies, payments of Zambian corporation tax and gemstone royalties stand at all-time highs and we believe the same to be true for total tax and royalty receipts from the Zambian gemstone sector. This record of success and growth should not be put at risk,” Mr. Harebottle stated.

“Since Gemfields acquired Kagem in mid-2008, we have pursued a strategy for Zambian emeralds not only to compete on the world stage, but to lead the sector internationally. Our ambition has been to turn Kagem into a Zambian national champion and a shining example of what can be achieved in well-founded partnerships between government and investors. I believe we have achieved that goal, and can go much further. I therefore hope that we will continue to enjoy a Zambian legal and business framework that enables the Zambian gemstone sector to remain competitive globally”.

THE Grain Traders Association of Zambia (GTTA) has urged the Government to rescind the decision to ban maize exports.

GTTA chairperson George Liacopoulous said in Lusaka yesterday that the association received the announcement by Agriculture and Livestock Minister Robert Sichinga on Friday with shock.

Mr Liacopoulous, however, assured that his association would comply with the ban.

“To be honest, the announcement to ban the exportation of maize and its products came as a big of a surprise to us considering that on February 13, we were granted a permit to export a limited quantity of 35,000 tonnes in the absence of a viable domestic market,” he said.

He said Government granted the GTTA a permit to export to neighbouring countries after discovering that it was impossible for the private sector to sell its grain domestically because the Food Reserve Agency (FRA) was doing so at a subsidised rate.

”Government should also allow the private sector to participate in the export programme,” he said.

He wondered how the issue of food insecurity would arise when he was aware that the FRA had more than 700,000 tonnes in its reserves.

Mr Liacopoulous said the GTTA had so far exported about 20,000 tonnes from a total 35,000 tonnes, but that it could not export the remainder before the Ministry of Agriculture and Livestock verified the stocks.

He was hopeful Government would allow for the offloading of the remaining stocks from the last farming season to pave way for the next season besides reversing the ban.

“Government should rescind its decision if it proves that there is more than enough maize in the country,” he said.

On Friday, Mr Sichinga announced the ban on the export of maize and its products until the status of Zambia’s food security had been verified.

Mr Sichinga, however, said traders who had already loaded trucks in readiness for export would be allowed to complete their transactions upon verification by officials from the Ministry of Agriculture and Livestock.

He said the Government-to-government exports to the Democratic Republic of Congo, Malawi, Tanzania and Zimbabwe would not be affected by the

President Michael Sata yesterday urged countries that attended the Boao Forum for Africa summit to support former Zambian Trades and Commerce Minister Felix Mutati as the next Secretary General (SG) of the Geneva-based UN Conference on Trade and Development (UNCTAD).

Mr Sata made the appeal in his usual bonhomie style before delivering his remarks at the economic summit’s opening ceremony held on the coastal island of Boao south of the Chinese capital Beijing.

He said Zambia for the first time in 50 years was applying for the prestigious UNCTAD position and joked that since the Zambian delegation was the only black delegation it deserved the support of the forums’ participating nations.

Based on the tradition of geographical rotation, the next head of UNCTAD should come from Africa.
At least four applicants from African, including Mr Mutati were lobbying for the high-status job.
The Geneva-based UNCTAD would have a new SG by September.

Foreign media reported that UN Secretary-General Ban Ki-moon, who is vested with the power to nominate the new UNCTAD chief, heads an opaque selection process where he refuses to even name a short-list of candidates, as with all other senior appointments in the world body.

Mr Ban’s choice was expected to be routinely endorsed by the 193-member General Assembly, which had never rejected a nomination from an SG.

The next SG of UNCTAD, in addition to all the necessary experience, knowledge and management abilities, was expected to have the capacity and courage for independent thought.

The last seven UNCTAD heads were Raul Prebisch from Argentina, Manuel Perez-Guerrero of Venezuela, Gamani Corea of Sri Lanka, Alistair McIntyre from Grenada, Ken Dadzie of Ghana, Carlos Fortin from Chile and Rubens Ricupero of Brazil.

Established in 1964, UNCTAD promotes the development-friendly integration of developing countries into the world economy.

Some of the countries that participated in the forum whose support was lobbied were hosts China, Brunei, Mexico, Peru, Finland, Australia, Algeria and New Zealand.

GOVERNMENT has given Zesco US$255 million from the US$750 million Eurobond to invest in power generation and distribution.

Of the US$255 million, US$30 million has been invested in the Itezhi-tezhi hydro-power station with an addition US$60 million expected to be invested in the same project.

Minister of Mines, Energy and Water Development Yamfwa Mukanga says Government is committed to ensuring that the country has reliable power supply to spur economic development.

“We [Government] have given Zesco US$255 million because Government wants to see how best Zesco will execute all these projects. We are together and we want to ensure that as a parent we provide for our children,” he said.

Mr Mukanga said this in Siavonga when he toured the Kariba North Bank hydro-power station on Thursday.

The minister said Zesco is on course by undertaking power generation projects and Government will ensure that the Kariba North Bank and Itezhi-tezhi power projects are completed within the planned time frame.

Mr Mukanga also said Government will ensure that Kafue Lower hydro-power project is completed when the Patriotic Front is still in power.

He said Government has been assisting the power utility firm and the proceeds from the sovereign bond is one of the assistance it has provided.

Mr Mukanga, who was happy with the progress made at the Kariba North Bank power station, however, said Zesco needs to prove to the country that it is capable of delivering quality service.

“You are doing a good job but the job is not good enough. You need to prove to the public that you can provide reliable energy.

People are in a hurry to have reliable energy to develop various economic projects,” he said.
He also said the institutions and members of the public should support efforts aimed at providing reliable power by ensuring that energy is conserved.

“We cannot have 1,000 bulbs on, at the same time, in the same place and expect to save power,” he said.

At the same occasion Zesco managing director Cyprian Chitundu said apart from the Eurobond proceeds, the power utility has also obtained finance from among other institutions, the World Bank, European Investment Bank and China Exim Bank to undertake power generation, transmission and distribution projects.

Mr Chitundu said the firm remains committed to undertake power projects as this is key in spurring economic development.

He said the power utility will also ensure that it saves on costs as it undertakes power projects developing existing power stations.

Zesco has spent US$ 80 million on the addition of 90 megawatts (MW) on Kafue Gorge power station when it would have spent US$270 million if it had developed a new project.

The firm has also spent US$420 million on the 360 MW Kariba North Bank extension project when the company could have spent more than US$1billion.

Choma Central Member of Parliament Cornelius Mweetwa has challenged the Patriotic Front government to quickly declare the 2012-2013 farming season a national disaster.

Mr. Mweetwa who is also United Party for National Development(UPND)Deputy Spokesperson has observed that the current statistics of the expected yield for the farming season indicate that there is going to be an inevitable hunger breaks out in the country.

Mr. Mweetwa noted that this farming season’s expected poor yield is mainly caused by erratic rainfall experienced in some parts of the country and the delayed distribution of farming inputs by the government.

He urged the PF government to heed advice from the opposition political parties in the country on important national issues such as the need for an early distribution of farming inputs to farmers to avoid a situation as will be experienced this farming season.

He was speaking in an interview with Qfm