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 133,900 carats of premium emerald for the year ended 31 December 2020.
Kagem has generated total cumulative auction sales revenue of USD749 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’ 39 auctions of emerald and beryl mined at Kagem since July 2009 have generated US$749 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.
Mining operations were well on track during the first quarter of the year until the full impact of Covid-19 led to the suspension of principal operations from 30 March 2020. Kagem recommenced operations at the wash plant from 17 March 2021. Up until the suspension of principal operations in March 2020, Kagem continued work in all three pits: Chama, Fibolele and Chibolele.
Fibolele was mined all along the 600m strike length. The adjacent pit was dewatered so that the present working pit can be extended along the strike direction. Chibolele was mined at two productive sectors and a pushback for western extension was initiated.
Gemstone production for the year was 9.4 Mct of emerald and beryl, with 133,862 carats of premium emerald. This is a sharp fall from the previous year as the operation was suspended since March 2020.
Of the total production, Chama pit contributed 7.88 million carats, Chibolele contributed 1.38 million carats and Fibolele provided 0.13 million carats.
In addition to the steps taken to upgrade the security system in and around the pits in the previous years, in 2020 an additional CCTV tower was erected to establish more focussed surveillance at Chama contact points, radio communications were improved, and patrol teams specific to particular zones were formed and deployed. A new palisade fence was erected around the sort house to enhance security.
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.
Thanks to the sterling efforts of our team in Zambia, Kagem achieved remarkable production of “premium emeralds” during the only operating quarter of 2020.
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.