Published: 27 January 2014
The Government of the Republic of Zambia, a 25-percent shareholder in Kagem Mining Limited, received its K10.94 million (about USD 2 million) share of the K41.6 million(about USD 8 million) dividends declared by the emerald mining company.
“This is the first dividend paid by Kagem in its 29 year history and the first such payment to the Government from any gemstone operating in Zambia,” said Minister of Finance Alexander Chikwanda in Lusaka.
Chikwanda added that Kagem needs to expand its operations significantly and partner with Government to increase its capital stocks in its efforts to alleviate poverty.
Back in 2008, when London-listed Gemfields Plc. first acquired a 75-percent beneficial interest of Kagem, the mining company was loss-making and its total annual sales was approximately USD 8.9 million, broadly the same as the dividend now being paid. It then implemented a pioneering incentive scheme, paying bonuses to all Kagem employees for each month in which pre-determined emerald productions thresholds are reached, according to London Stock Exchange.
“Kagem is the flag bearer of the Zambian gemstone sector, and one of the finest examples of what can be achieved in partnerships between government and foreign investors in the mining sphere,” said Gemfields CEO Ian Harebottle.