* Zambia says auctioning of emeralds should be held in the
* Gemfields says its next auction in Lusaka in April
April 8 Precious stones miner Gemfields Plc
said the Zambia government's potential ban on overseas
auctioning of gemstones could hurt revenue at its core Kagem
emerald mine in north Zambia, sending its shares down as much as
The Zambian Ministry of Mines, Energy and Water Development
issued a directive on Friday that all auctioning of emeralds be
held in Zambia as their sale in foreign markets contributes to
"Gemfields has got around 20 percent of the world's
(emerald) market, which comes from Zambia," Chief Operating
Officer Dev Shetty told Reuters.
"Not allowing Gemfields to auction abroad is going to take
us out of the competition with Brazil and Colombia, which holds
30 percent each of the world's supply of emeralds," Shetty said.
S.P. Angel analyst Carole Ferguson, however, said Zambia was
trying to flex its muscles.
"It's just a matter of negotiating with the government - I
don't see how the government could realistically expect them
(Gemfields) to have all the auctions in Zambia and generate the
type of revenue they're generating," Ferguson told Reuters.
Gemfields, owner of the Fabergé luxury jewellery brand, said
it would host an auction in Lusaka this month and that its next
foreign auction was scheduled to take place in Singapore in
June. Zambia owns the rest of Kagem.
The company, which named actress Mila Kunis as its brand
ambassador earlier this year, mines mainly emeralds at its 75
percent-owned Kagem mine, but also has interests in ruby and
Output from Kagem has been sold solely outside the country
since 2009, generating $160 million of revenue from 11 auctions
Kagem generated revenue of $77.6 million in 2012, compared
with $8.8 million in 2008 when Gemfields bought the mine.
A potential ban would also affect Gemfields' Kariba amethyst
mine in south Zambia, in which the company has a 50 percent
stake, it said.
Gemfields' shares were down 17 percent at 24.75 pence on the
London Stock Exchange at 1420 GMT on Monday.