Emerald miner Kagem to invest $100m
KAGEM Mining Company will invest about US$100 million over the next five years to double emerald production, chief executive officer Ian Harebottle has said.
Harebottle, who was speaking in Lusaka last week, said the US$ 100 million investment will result in the mine increasing emerald production to about five million carats from the current 2.5 million carats per month.
Mr Harebottle said of the amount, US$30 million will go towards the wash plant and other projects while the balance will go towards continued re-capitalisation of the mine.
He said Kagem mine, which is co-owned by London-listed Gemfields and the Zambian government at 75 percent and 25 percent respectively, has been transformed from bankruptcy to a profit-making mine due to investments in equipment, technology and skilled manpower.
It currently costs Kagem mine about 80 cents to produce a carat of emeralds which is sold at US$5 on the international market, unlike previously when the mine spent about US$1.50 to produce a carat which was later sold for only 50 cents.
“Over the last three years, we have paid off all the debt, tax losses and we brought more than US$150 million of foreign revenue into Zambia,” he said.
Mr Harebottle said the mine remains committed to the country as evidenced by the continued investment and marketing of the Zambian gemstones on the international market.
“Kagem has helped push rough emerald prices up ten-fold in the last three-and-a-half years thanks to a worldwide focussed and consistent marketing campaign aimed at increasing demand for Zambian emeralds,” he said.
He however said the mine, which produces 20 percent of the world’s rough emeralds, will only continue to invest in various projects if the economic environment remains favourable.
Mr Harebottle commended Government for the continued support and partnership, saying the development will stimulate the growth of the mine and the prominence of the gemstones on the international market.
Of the estimated US$500 million proceeds from global emerald production, Zambia accounts for about US$167 million with Kagem mine contributing 50 percent.
“Kagem is proud to be partnering with the Zambian government to build the nations gemstone sector into a vibrant industry that upholds the highest standards of business ethics and also maximises profitability for the benefit of employees, suppliers and shareholders including the people of Zambia,” he said.
On the outlook of the gemstone sector, he said he is upbeat that the sector will continue to grow if the current global prices remain stable.