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(Corrects company's name in paragraph 2 to Gemfields fromGemstone)
April 8 (Reuters) - Precious stones miner Gemfields Plc said the Zambian government could curb its ability tosell gemstones outside the country, potentially hurting revenueat its core Kagem emerald mine in north Zambia.
The Zambian Ministry of Mines, Energy and Water Developmentdirected on Friday that all auctioning of emeralds be held inZambia as their sale in foreign markets contributes to capitalflight, Gemfields said in a statement.
Output from Kagem has been sold solely outside the countrysince 2009, generating $160 million of revenue from 11 auctionsabroad.
Gemfields, which named actress Mila Kunis its brandambassador earlier this month, mainly mines emeralds at its75-percent-owned Kagem mine, but also has interests in ruby andsapphire deposits.
The potential ban would also affect Gemfield's Karibaamethyst mine in south Zambia, in which the company has a 50percent stake, it said.
Gemfields' shares were down 19 percent at 23 pence at 0728GMT on the London Stock Exchange on Monday. (Reporting By Richa Naidu in Bangalore; Editing by DonSebastian)
