Kagem pays US$14m dividend to IDC


LUFWANYAMA based emerald Kagem Mining has paid a US$14 million June 30, 2015 dividend to its shareholders, the Industrial Development Corporation (IDC), which owns 25 per cent of the company on behalf of the Zambian government.

Company chief executive officer Ian Harebottle  said Kagem’s ability to pay dividends was good news for the Government and its people because it demonstrated what could be done when national resources and world-class private sector expertise joined forces to create a flagship global business.

Mr Harebottle said global appreciation and demand for coloured gemstone continued to increase at a steady pace, largely supported by Gemfields global marketing efforts.

In a press release, he said Kagem would remain committed to developing its pipeline of growth projects such as the recent moves into Ethiopia and Colombia reflects.

“Our three consecutive years of dividends, supported by the considerable increase in jobs and skills that have been created at the mine, show that the benefits of that collaboration can be shared by all parties and in an equitable manner,” he said.

The dividend for the year ended June 30, 2015, was the third dividend paid to shareholders by Kagem and brings to US$30 million the total dividends declared in the last three years.

The dividends were in addition to the more than US$43.7 million in corporate taxes and mineral royalties that had been generated by the company in the last three years.

In the last three years of dividends, the first in the Kagem’s history have been facilitated by the turnaround strategy initiated at Kagem, in conjunction with the Zambian Government, since 2008 when London-listed Gemfields acquired a 75 per cent beneficial interest in the company.

Gemfields recently reported that Kagem recorded a 49 per cent year-on-year increase in the volume of gemstones produced.

The mine produced 30.1 million carats of emeralds and beryl in its 2015 financial year, compared with the 20.2 million carats produced in the 2014 financial year.

This is the second highest recorded annual production ever achieved at the Kagem mine. The highest production was 33 million carats in 2011 (a carat is equal to 0.2 grams).

The figures were reported in Gemfields’ final audited results, which showed a 7 per cent increase in revenue for the group to US$171.4 million and profit before interest, tax, depreciation and amortisation of US$64.4 million compared with the US$59.3 million achieved in the 2014 financial year.

Despite the reduction in profit after tax to US$12.3 million from the US$16.3 million in 2014 and the various other challenges currently facing the global mining sector, Gemfields remained optimistic about the prospects for the gemstones sector in the coming years.

The company’s operations in Zambia contributed US$65 million or 38 per cent of the group’s revenue and US$9.36 million or 30 per cent of its operating profit.