Kagem11 Apr 2013 00:20
I found this on the Zambia daily mail site.. http://www.daily-mail.co.zm/?p=3791 (Link no longer works weirdly)
KAGEM Mining Limited plans to invest over US$30 million over the next two years to operate underground emerald mining.
Kagem Mining Limited director Sean Gilbertson says the mine, which embarked on trial underground mining two years ago with an investment of US$3 million to date, is expected to invest US$30 million with an additional US$20 million when it commences full-scale underground mining.
"To date, we have invested US$3 million in the trail operation and plan to invest over US$30 million over the next two years. We could spend up to US$50 million when we start full-scale underground mining," he said.
Mr Gilbertson said this in an interview in Lufwanyama on Tuesday.
He said underground mining is proving to be more efficient than open-pit mining.
"Underground mining is the future of Zambia's emerald belt given the amount of rock that has to be moved on a daily basis to get the emeralds out. At present we have to move five million kilogrammes (kg) of rock to get one kg of emerald, but we don't have to move as much rock in underground mining," he said.
Kagem, which is owned by London-listed Gemfields and the Zambian government at 75 percent and 25 percent respectively, will become the first emerald mine to operate an underground mine in the country.
On the recent ban of auctioning of emeralds abroad, Mr Gilbertson said Government should rescind the decision and allow the mine to auction the gems in places where they can get the best price.
The announcement to ban the sale of gemstones abroad resulted in Gemfields shares on the London Stock Exchange to drop by 25 percent on Friday.
"Every auction, since we came on board in 2008, has been done in London, Singapore, Jaipur and South Africa and the revenues are there to show. We need to sell where the competition among buyers is the strongest because the more buyers the better," he said.
He said auctioning the gemstones locally will inconvenience the buyers as they have to travel long distances and will result in Zambia's competitors, Colombia and Brazil, which have no auction restrictions being the preferred gemstones.
"If we force the customer to undertake long and costly journeys to buy our emeralds, we are doing ourselves a disservice, and making it easier for other nations to win those customers," he said.
Meanwhile Mr Gilbertson said Gemfields will hold a gemstone auction in Lusaka next week following Government's directive.
He said while a lot of buyers are expected to attend the auction, it is unlikely that the mine will realise the desired revenue at the local auction.
On the production side, Mr Gilbertson said the mine produced about 2.5 million carats in January this year.
The mine has also paid close to US$4 million in royalties and US$9 million to Zambia Revenue Authority (ZRA) as at June 2012.
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