Kagem Emerald Mine Contributes 31% of Revenue to Zambian Govt
The Kagem emerald mine, located in Lufwanyama, Zambia, made a substantial contribution to the Zambian government in 2023. According to figures released by its parent company Gemfields, Kagem paid nearly a third of its total revenue to the government.
Based on Gemfields’ “G-Factor for Natural Resources” metric, Kagem’s contribution amounted to USD 28.3 million out of its total USD 92.7 million in revenue for 2023. This translates to a 31% share.
The G-Factor is a measure designed to increase transparency regarding the portion of natural resource wealth shared with governments by mining, oil, gas, timber, or fishing companies in their host countries. Gemfields introduced this metric in July 2021.
The G-Factor specifically focuses on a company’s revenue rather than profit after expenses, which is the more traditional method.
Gemfields encourages other industry players, including governance bodies, extractive companies, and governments, to adopt the G-Factor to promote transparency and accountability concerning government revenue from natural resources.
The G-Factor for Natural Resources is calculated as a percentage using a formula that considers primary and direct taxes paid to the government, along with dividends if the government holds shares in the company.
This metric aims to assess the efficiency with which natural resource companies translate those resources into financial benefit for the host country.
“The G-Factor provides a clear indicator, allowing observers to compare how effectively extractive companies convert resources into wealth for host nations,” said Sean Gilbertson, CEO of Gemfields. “We believe this will be valuable for governments seeking to increase their participation in their natural resource sectors.”
For 2023, the G-Factor calculation for Kagem factored in export duties and levies as an additional parameter, aligning with practices in other countries within the region.
Gemfields hopes that the G-Factor will be voluntarily adopted by other companies, mandated by host governments, and potentially integrated into initiatives like the Extractive Industries Transparency Initiative (EITI).
