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Kagem Auction Revenue falls amid Indian Market Turbulence

Filed under: Breaking News,Business |
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Revenue generated by an auction of high quality emeralds from the Kagem mine in Lufwanyama hit an eight-year low last week, with the company raising just US$10.3 million, less than half the amount of its previous auction in Lusaka last year.
Only 10 of the 17 auction lots offered were sold at the auction, which attracted more than 35 leading international gemstone buyers and who bought just 56 per cent of the total carat weigh offered.
The downturn was attributed to uncertainty in the Indian gem trade driven by a tightening of financing availability in India after the Nirav Modi fraud, said Sean Gilbertson, CEO of Gemfields, which owns Kagem in partnership with the IDC of Zambia.
An ill-timed and illegal work stoppage at Kagem, as reported in the national press and coinciding with the auction in Lusaka, may also have tainted the auction. Mr Gilbertson confirmed that Kagem staff had now resumed work following last week’s dispute involving a faction of Kagem’s employees and their nominated representatives from the National Union of Miners and Allied Workers (NUMAW) and the Mineworkers’ Union of Zambia (MUZ), with the faction seeking to put forward a parallel leadership negotiating team other than the duly elected union representatives.
The auction saw 31 companies placing bids and generating total revenues of USD 10.3 million with a robust overall average price of USD 59.55 per carat. Of the 17 auction lots offered, 10 were sold.
An auction lot comprising 3 gems weighing 37.5 carats in total was won by H.C. Tank, setting an all-time price-per-carat record for Gemfields emerald auctions.
Of the 17 lots offered, 9 lots featured the new “Provenance Proof” nano-particle technology developed by the renowned Swiss gem laboratory, Gübelin, as first announced by Gübelin and Gemfields at BaselWorld in April 2017.
“We are delighted that Zambian emeralds are the first gemstones in the world to deploy Gübelin’s “Provenance Proof” nanotechnology, a remarkable breakthrough in emerald traceability”, said Gemfields chief executive Sean Gilbertson. “Of the 17 auction lots we offered for sale, 9 featured the technology, with 5 of the 9 being sold: a clear indicator of the confidence already placed in this breakthrough.”
The nano-particles tag the emeralds as having been mined at Kagem and allow identification of the mine-of-origin for decades to come, providing unparalleled traceability for the gem sector. Gemfields’s 28 auctions of emeralds and beryl mined at Kagem since July 2009 have generated USD 517 million in total revenues.
The specific auction mix and quality composition of the lots offered at each auction vary in characteristics such as size, colour and clarity on account of variations in mined production and market demand. Therefore, the results of each auction are not always directly comparable.

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