This policy change, which was implemented without prior consultation, adds to the company's existing tax obligations, bringing the total effective revenue tax for its 75%-owned subsidiary, Kagem Mining, to 21%, including the 6% mineral royalty tax.

The decision has had an immediate impact on Gemfields' market performance. In London, the company's shares dropped by 4.3% to 6.7p per share, while in Johannesburg, they fell by 12%, reducing its market capitalization to approximately $106 million.

Gemfields has voiced concerns over the financial strain this tax imposes on the gemstone mining sector. In 2023, when no export duty was in place, Kagem Mining contributed around 31% of its revenues to the Zambian government through mineral royalties, corporate taxes, and dividends. The company now plans to engage with government officials to seek the removal or suspension of the export duty, arguing that it could discourage investment and threaten industry sustainability.

Zambia, the world's second-largest emerald producer after Colombia, has introduced broader fiscal measures aimed at increasing government revenues. The country is targeting a GDP growth rate of 6.6%, an inflation range between 6% and 8%, and a budget deficit of 3.1% of GDP. According to PwC, tax revenues are expected to grow by 20%, with domestic revenues and grants projected to rise by 26%.

While Zambia remains a crucial hub for Gemfields, the company also has a diverse global portfolio. It owns the luxury jewellery brand Fabergé and holds a 75% stake in the Montepuez ruby mine in Mozambique.

With the return of the export duty, the coming months will be critical as Gemfields and other industry players navigate the challenges posed by Zambia’s shifting tax landscape.