The world’s single-largest producing emerald mine. The 41 square kilometre licence area is located in the Ndola Rural Emerald Restricted Area and lies south of Kitwe and west of Ndola, in Zambia’s Copperbelt Province. It is 75% owned by Gemfields and 25% owned by the Government of the Republic of Zambia. The mine comprises three open pits.
For more information on Gemfields, please visit: www.gemfields.com
Kagem produced 259,500 carats of premium emeralds in 2022.
Kagem has generated total cumulative auction sales revenue of USD920 million since July 2009.
In 2007, Gemfields Group Limited (formerly Pallinghurst Resources Limited) (“GGL”) identified the coloured gemstone sector as an “overlooked” industry that offered a unique investment opportunity. Demand for coloured gemstones by the jewellery and fashion sectors was increasing, but supply was constrained and fragmented due to the lack of large, reliable producers able to consistently deliver sufficient quantities of gemstones. Pallinghurst saw an opportunity to unlock value by bringing capital, scale and professionalism to the industry, to which end it assembled a consortium of Pallinghurst Co-Investors, including the Group.
Kagem, an emerald mine in the “Copperbelt” region of northern Zambia, currently producing nearly a quarter of the world’s emeralds, was the consortium’s first acquisition in the sector. Kagem had been producing emeralds for nearly 20 years but was performing badly due to a combination of poor management, theft, shareholder conflicts and a lack of capital. Through a series of transactions, the consortium acquired 75% of Kagem, with the balance held by the Government of the Republic of Zambia. In pursuing its vision for consolidating the sector, the consortium acquired majority control of AIM-listed Gemfields plc (“Gemfields”) by selling Kagem to Gemfields in a reverse takeover during 2008.
The Mbuva-Chibolele licence is located on the Fwaya-Fwaya–Pirala Belt in the NRERA within the Kafubu area of the Copperbelt Province of Zambia, on the southern banks of the Kafubu River. It lies along the west-southwest strike from the nearby Fwaya-Fwaya emerald mining zone adjacent to the Kagem licence area. This pit was kept under care and maintenance from 2007 onwards so as to focus on operations at Kagem. However, following GGL’s acquisition of Gemfields, a decision was made to expand the Group’s emerald footprint and, accordingly, operations at Mbuva- Chibolele were resumed in late 2017.
During October 2019, in accordance with the Licence Transfer Agreement between Gemfields Mining Limited and Kagem, the Chibolele, Kamakanga and Arinus licences held by Gemfields Mining Limited were transferred to Kagem. The transfer was approved by the Ministry of Mines and Mineral Development. In February 2020, the remaining eight licences included under the same Licence Transfer Agreement were approved by the Ministry of Mines and Mineral Developments and transferred.
Gemfields implemented an innovative grading and auction system for selling its rough gemstones. The auctions are held in secure locations with the material separated into homogenous lots and certified as either having been produced by Gemfields or obtained by Gemfields from third parties. The world’s leading rough gemstone buyers submit sealed bids for individual lots. A sale occurs if the highest bid received exceeds a pre-determined, but undisclosed, reserve price. The auctions have brought a level of professionalism and transparency previously not seen in the industry.
As there was no industry standard for evaluating rough coloured gemstones, Gemfields established its own grading system to assess each gem according to its individual characteristics (size, colour, shape and clarity). This approach has been instrumental in providing buyers with confidence in the consistent quality of the material on offer. Gemfields used this grading system to develop two auction classes, one offering higher quality gemstones and the other for the larger volume of lower quality gems.
Since its first auction in July 2009, Gemfields has seen increased demand for its responsibly sourced and transparently supplied emeralds, highlighting the success of its formalised and consistent method of marketing rough coloured gemstones by auction.
Gemfields’ 44 auctions of emerald and beryl mined at Kagem since July 2009 have generated USD920 million in aggregate revenues. Gemfields continues to experience significant demand for its responsibly sourced emerald and beryl with successive auctions regularly achieving record per carat prices and auction proceeds.
Kagem holds an asset portfolio of nine mining and three exploration licences in Zambia, with the primary operations being Chama, Chibolele and Fibolele. The principal operation is in the Ndola Rural Emerald Restricted Area (“NRERA”) and lies south of Kitwe and west of Ndola, in Zambia’s Copperbelt Province.
• Chama, an open-pit mine extending over 2.2 kilometres of strike length and supplying approximately 25% of global emerald production.
• Chibolele, an open-pit mine with a strike length of 520 metres.
• Fibolele, an open-pit mine with a 600-metre-long strike length.
Gemstone production for 2022 was a total of 37.2 million carats of emerald and beryl, with 259,500 carats of premium emeralds.
In 2022, new surveillance guard posts were also created in Chibolele, Kamakanga pit area, and the washing plant areas. New security booms were created near Gate A, Chibolele and Kamakanga to monitor vehicle movement. One additional drone was procured which helped increase the surveillance of the licence area.
Kagem continues to mine in a responsible, transparent and safe manner whilst sticking to the tenets of legitimacy, transparency and integrity as an essential part of health, safety and environment (“HSE”) and its commitment to mining safety and environmental conservation. We aim at a zero-harm (injury-free) culture and our efforts can never be overemphasised as the health and safety of our employees is not only considered critical to the operation but is also ultimately the responsibility of each individual.
The sustainability and corporate responsibility activities aim to position Kagem in good standing with local communities and to ensure that its policies impact positively on people and complement Government in reducing poverty levels and suffering amongst the people. Our approach is community participation in line with Government policy.
Kagem is 75% owned by Gemfields. Gemfields is in turn owned by thousands of shareholders via Gemfields’ public company listings on the London (AIM) and Johannesburg stock exchanges. Gemfields has no controlling shareholder.
The remaining 25% of Kagem is owned by the Industrial Development Corporation of Zambia (“IDC”), a state-owned enterprise charged with the mandate to spearhead the Zambian Government’s commercial investments agenda, which aims to strengthen Zambia’s industrial base and aid job creation. The IDC of Zambia was incorporated in January 2014 and is 100% owned by the Zambian Government.
The IDC’s investment portfolio spans a wide range of sectors including agriculture, energy, healthcare, transportation and logistics, and mining.
Kagem continues to recover outstanding Zambian emeralds and has generated record auction revenues of USD149 million in 2022.
Gemfields is delighted to introduce “Chipembele”, the latest and largest significant gemstone discovered at the Kagem emerald mine in Zambia.
Please click below to download the ‘Chipembele’ press statement.
The global coloured gemstone market continues to grow soundly and Gemfields has the potential to expand through its existing emerald and ruby businesses, its recently acquired projects and to apply its successful model to other coloured gemstones.