Gemfields Emerald Auction in Zambia Raises $31.5 Million

Gemfields spokesperson Mila Kunis.

Maybe holding emerald auctions in Zambia isn’t such a bad idea. The ongoing tug of war between the Zambian government and colored gemstone mining and marketing company, Gemfields, over where to sell Zambian emeralds hasn’t dampened demand.

Gemfields’ most recent auction of higher quality rough emerald and beryl from the Kagem mine in Zambia resulted in revenues of $31.5 million, the second highest total to date for the company. The average price per carat reached $54, the highest unit value achieved at any auction and a 26 percent increase over the previous highest value achieved in July 2011. In addition, a 54-carat rough gem, offered as a single lot, set a new per carat record for prices achieved at a Gemfields auction.

A total of 40 companies were invited to the auction held July 15 - 19 in the Zambian capital city of Lusaka and 37 attended, with 36 attendees placing at least one bid, Gemfields said in a statement Tuesday. A total of 583,448 carats of emerald extracted from Kagem was placed on offer, with all lots being sold. The auction format is how Gemfields chooses to sell its Kagem emeralds, which account for nearly all of the company’s revenue.

The auction was held in Lusaka at the request of the Zambian Ministry of Mines, Energy and Water Development. The government first issued the directive in April, which appeared to be a surprise to Gemfields. Particularly since the two entities are business partners, with Zambia owns a 25 percent stake in the Kagem mine with Gemfields owning the remaining 25 percent.

The government in a statement said the directive is designed to promote transparency and accountability in the marketing of emeralds, stimulate local demand for emeralds, create more opportunities for small-scale miners to have access to colored gemstone markets, and increase tourism.

“Zambian gemstones have for a long time been sold on foreign markets, a situation that has contributed to capital flight and denied Zambians of the much needed benefits from the resource,” Yamfwa Mukanga, Zambia mining minister, said in the original statement.

This is the second auction of Kagem emeralds held in Lusaka. It was originally scheduled to be held in Singapore June 10-14, but was postponed and rescheduled to Lusaka due to government pressure.

Gemfields insists that it needs to sell Kagem emeralds at places that will likely get the most interest and the best price in order to compete with other emerald hubs, such as Colombia and Brazil. With the most recent sale showing such strong results the government seems to have the upper hand in this argument.

In a statement, Ian Harebottle, CEO of Gemfields, credited “favorable market conditions and particularly strong demand from our customers” for the strong results. “All indications show that demand for colored gemstones, and especially emeralds, will continue to increase at a steady pace over the coming year.”

Gemfields said its 13 auctions held since July 2009 have generated $207.3 million in aggregate revenues.

Please join me on the Jewelry News Network Facebook Page, on Twitter @JewelryNewsNet and on the Forbes Web site.

Zambia Restriction on Gem Sales A Major Setback for Gemfields

Mila Kunis in a Gemfields ad.

The Zambia Ministry of Mines, Energy and Water Development issued a directive Friday stating that all auctioning of emeralds be held in Zambia, arguing that their sale in foreign markets contributes to capital flight. The timing of this order has dealt a major blow to the emerald ambitions of Gemfields, which operates what is believed to be the world’s largest emerald mine in Zambia.

The government in a statement said the directive is designed to promote transparency and accountability in the marketing of emeralds, stimulate local demand for emeralds, create more opportunities for small-scale miners to have access to colored gemstone markets, and increase tourism.

“Zambian gemstones have for a long time been sold on foreign markets, a situation that has contributed to capital flight and denied Zambians of the much needed benefits from the resource,” Yamfwa Mukanga, Zambia mining minister, said in the statement.

The move seemed to have come as a surprise to the London-listed company and the markets. Gemfields shares fell 16 percent Monday after the government announcement. In the past, Gemfields held its emerald auctions in other locations, including Singapore and in Jaipur, India. The next auction of its emeralds was already planned to be held in Zambia’s capital city of Lusaka from April 15 - 19.

The company is in partnership with the country of Zambia, which makes this seemingly sudden announcement more difficult to understand. Gemfields owns a 75 percent stake in the Kagem emerald mine with the government owning the remaining 25 percent. In addition, the two parties own a 50-50 stake in the Kariba amethyst mine, which will also be affected by the outside selling ban.

“Not allowing Gemfields to auction abroad is going to take us out of the competition with Brazil and Colombia, which holds 30 percent each of the world's supply of emeralds,” Dev Shetty, Gemfields COO, told Reuters.

The company that wants to do for emeralds what De Beers did for diamonds in the 20th Century recently had a string of marketing successes. It signed actress Mila Kunis as its ambassador; released an emerald-specific colored gemstone jewelry line made by independent jewelry designers ranging from Theo Fennell and Stephen Webster, Shaun Leane and Alexandra Mor; and finalized the acquisition of luxury jeweler Fabergé.

Since 2007, Gemfields has been creating a mine-to-market initiative for its emeralds using the Kagem mine as a single, traceable source for its emeralds. In addition, it is working on a program to mine its emeralds in adherence to fair-trade practices and in accordance with environmental, social and safety standards.

Please join me on the Jewelry News Network Facebook Page, on Twitter @JewelryNewsNet and on the Forbes Web site.

Mila Kunis and Jewelry Designers Launch Gemfields Bespoke Colored Gemstone Jewelry Collection

Mila Kunis takes center stage among jewelry designers at Gemfields event.

Actress Mila Kunis joined a group of fine jewelry designers to help launch a bespoke jewelry collection created with emeralds, rubies and amethysts provided by Gemfields, a colored gemstone miner and marketer.

The jewelry collection was unveiled at the Phillips Auction House in London. It was created by 36 jewelry designers that partner with the London-based company and primarily consist of Zambian emeralds, Mozambican rubies and Zambian amethysts. The jewelry ranges in price from $1,130 to $750,000.

Many of the designers who created the jewelry were at the launch, including Theo Fennell, Stephen Webster, Shaun Leane, Dickson Yewn and Alexandra Mor. They shared the spotlight with Kunis and celebrities from the U.K. and India, including Jacquetta Wheeler, Kamika Kapoor and Nina Naustdal.

To coincide with the launch of this project, Gemfields presented its new global advertising campaign featuring Kunis wearing ethically sourced Zambian emeralds and Mozambican rubies shot by Mario Sorrenti in Los Angeles.

This jewelry showcase will travel to India next and then to Las Vegas where it will be displayed at the Couture show in May. 

Gemfields first announced its relationship with Kunis and the new advertising campaign about a month ago. The company first disclosed its partnership with the jewelry designers in the fall of last year.

The campaign focuses on emerald jewelry, which coincides with Gemfields main business: the mining and marketing of emeralds from the Kagem mine in Zambia, which it has a 75 percent stake in. The same mine also produces amethysts. It is working to produce a mine-to-market strategy for their emeralds that it says will be ethical, transparent and sustainable.

The company also owns a 75 percent stake in the Montepuez ruby mine in Mozambique and the Kariba amethyst mine in Zambia.

If that’s not enough, in January Gemfields finalized its ownership of iconic Russian luxury jewelry brand, Fabergé, which receives a supply of the company’s best colored gemstones.

Earlier this month, the company released a bit of bad news in its half-year financial report, saying that core earnings fell 39 percent as it held just one auction during the period compared with two in the prior year. But production climbed by two-thirds.

Production rose about 65 percent to 14.5 million carats in the first half, mainly on higher grades recovered at its Kagem mine in Zambia. Earnings before interest, tax, depreciation and amortization fell to $19.5 million for the six months to December 31, from $32.2mn a year earlier.

Revenue from rough and finished emerald sales decreased 39 percent to $27.7 million.

Please join me on the Jewelry News Network Facebook Page, on Twitter @JewelryNewsNet and on the Forbes Website.

Mila Kunis Featured in Global Advertising Campaign for Gemfields

Mila Kunis, recently named “Sexiest Woman Alive,” by Esquire, is the newest ambassador and the face of the latest advertising campaign for colored gemstone producer, Gemfields.

In a statement Gemfields said that Kunis was chosen “for her natural beauty, versatility, intelligence and love of rare colored gems.”

Gemfields primary business is the mining, distribution and marketing of emeralds from the Kagem mine in Zambia. It is working to produce a mine-to-market strategy for their emeralds that it says will be ethical, transparent and sustainable. The company recently acquired Fabergé, and is supplying the luxury brand with Kagem emeralds for its newest creations. Both companies are controlled by Pallinghurst Resources, a private equity company focused on the mining sector.

The advertising campaign with Kunis is photographed by Mario Sorrenti and styled by Anastasia Barbieri, featuring “a fresh-faced and modern Kunis wearing one-of-a-kind emerald and ruby jewelry created by six of Gemfields’ designer partners: Alexandra Mor, Amrapali, Dominic Jones, The Gem Palace, Sutra and Fabergé.”

Kunis toured Kagem, accompanied by Ian Harebottle, Gemfields CEO, and visited several Gemfields-sponsored community projects, including schools and a farming cooperative.

“While in Africa, I learned that the entire journey that each Gemfields stone takes is carefully considered and that the environment and the local communities where its mines are located are held in the highest regard,” said Kunis.

“Mila has blown me away with her energy, enthusiasm and dedication,” Harebottle said.

The global advertising program is running in leading publications in India and is part of a several initiatives in a multi-pronged consumer campaign that Gemfields will roll out this year.

The Kagem mine also produces amethysts. Gemfields other business include a mine in Mozambique for rubies, and prospecting licenses for other gemstones in Madagascar.

Please join me on the Jewelry News Network Facebook Page, on Twitter @JewelryNewsNet and on the Forbes Web site.

Golden Globe Awards Red Carpet Jewelry Fashion, Part 4

Angelina Jolie in Robert Procop emerald earrings.

Kelly Osbourne in 18K matching white gold black geode and black diamond ring and earrings designed by Kimberly McDonald.

 

Olivia Wilde wears a Tiffany ring and clutch by Judith Leiber.

Mila Kunis in Lorraine Schwartz jewelry, including gold bracelet