Gemfields limited in Zambia
Actress Mila Kunis is the face of the Gemfields brand
Gemstone specialist Gemfields (LON:GEM) will see its emerald operations affected by government decisions to limit international sales in Zambia.
The Zambian government has revealed it intends to ban the company from selling its gemstones outside of the country, therefore preventing Gemfields from achieving the best price for its emeralds in foreign markets.
Gemfields' principal asset, the Kagem emerald mine is located in northern Zambia, of which the government owns a 25 per cent stake. While the current embargo only relates to emerald sales, the government has warned that it could extend the ban to all gemstones, which would see the company's amethyst mine in the south of the country also negatively impacted.
The government has claimed the sale of Zambian gemstones into foreign markets has caused 'capital flight' but Gemfields has retaliated by insisting it remains committed to repatriation of auction proceeds to Zambia and keeping transparency in these actions.
It regularly publishes auction information, including unit costs and revenue generated.
Chief executive of Gemfields, Ian Harebottle, has claimed any developments to the ban would see the 'health of the sector' potentially 'endangered', adding that the company's goal was only to see Zambian emeralds 'compete on a world stage'.
He concluded that this would no longer be possible should auctions only be allowed to take place within Zambian borders.
Shares in Gemfields fell more than 12 per cent this morning to 26p, valuing the company at £160.6 million.