Gemfields' first emerald auction of 2020 hampered by coronavirus

While the results of an auction of predominantly commercial-quality rough emeralds held in Lusaka, Zambia, from February 18 to 21, had been in line with prior auctions of commercial-quality emeralds, and demonstrated a stable underlying market, there was evident fallout of Covid-19, or the coronavirus, which dampened what might otherwise have been a buoyant result, Gemfields product and sales MD Adrian Banks said on Monday.

“Firstly, the uncertainty surrounding Chinese consumer demand in the wake of Covid-19 has understandably created negative sentiment in the midstream market.

“Secondly, a handful of our key auction customers did not travel to Lusaka as a result of the increased risk associated with Covid-19 and, thirdly, the Hong Kong market – important for both gemstones and jewellery – has had to endure multiple successive misfortunes,” Banks pointed out.

The emeralds were extracted by Kagem Mining, in which Gemfields holds a 75% interest and the Industrial Development Corporation of Zambia 25%.

During the auction, 29 companies placed bids, generating total revenues of $11.5-million, with an average value of $4.01 /ct.

Sixty-four per cent of the carats on offer were sold.

The proceeds of the auction will be repatriated to Kagem in Zambia, with all royalties due to the government of the Republic of Zambia being paid on the full sales prices achieved at the auction.