By Linda Soko Tembo | MakanDay Centre for Investigative Journalism
Shareholders in Gemfields, the London-listed company that operates Zambia’s Kagem emerald mine, have approved a $30 million emergency cash call to help the company stay afloat after steep losses last year.
The vote held on Monday, May 19, came just over a month after Gemfields’ released its annual report for 2024, in which independent auditors warned that without a cash injection the company would not have “sufficient funds to continue trading.”
Last year, the company recorded an enormous US $100m loss which it blamed on a damaging “oversupply” of discounted Zambian emeralds, weak demand from key markets like China and political unrest that affected its ruby operations in Mozambique.
As Makanday reported over the weekend, Gemfields’ financial troubles appear to be partly the result of a long-running corporate feud with rival miner Grizzly Mining. You can read our earlier story here: $30M lifeline key to saving world’s largest emerald mine from corporate feud fallout.
Gemfields considered increasing its borrowing or selling assets. But it decided to ask its shareholders to buy additional shares to raise money, in what is known as a “rights issue”. This request was approved yesterday, giving it the cash injection that it needs to continue operations.
While the shareholder approval provides the company with “working capital” so it can continue its operations, concerns will remain about the company’s financial stability.
Photo Credit | Rough emerald crystal from a Zambian mine
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