JSE- and Aim-listed Gemfields, a leading player in the coloured gemstone sector, has once again thrown open its books, reaffirming its “G-factor for natural resources” figures for its flagship Kagem emerald mine in Zambia and the Montepuez ruby mine in Mozambique. The latest data, spanning 2015 to 2024, reveals a 20% “G-factor” for Kagem and a robust 25% for Montepuez, underscoring the company’s commitment to transparency in its dealings with host governments.
The “G-factor for natural resources” serves as a crucial metric, indicating the percentage of natural resource revenue paid directly to the government of the country where the resource originates. Gemfields has championed this initiative since 2021, seeking to foster greater transparency and accountability in the often-opaque world of natural resource wealth sharing. For Gemfields, it’s also a measure of how efficiently mining companies convert their natural bounty into tangible funds for the nations hosting their operations.
In a pioneering move for the continent, Zambia in 2024 became the first African nation to publicly disclose “G-factor for natural resources” data for key companies on its Zambia Extractive Industry Transparency Initiative’s (ZEITI) online fusion portal. This digital step forward provides Zambian citizens with unprecedented direct insight into their country’s participation in its rich natural resources.
Sean Gilbertson, CEO of Gemfields, commented on the 2024 “G-factor” figures, acknowledging the varied contributions a mining company can make, heavily dependent on prevailing operating and market conditions. “Despite a challenging in-country context, the Montepuez mine was able to return a robust 24% of its revenue to the government of Mozambique, owing to a resilient ruby market,” Gilbertson noted, highlighting the success of the Mozambican operation.
However, the picture for the Kagem mine in Zambia was less sparkling in 2024. Adverse market conditions for Zambian emeralds in the latter half of the year significantly impacted the group’s profitability. This led to a temporary suspension of mining operations at year-end, causing Kagem’s “G-factor” percentage to dip sharply to just 9% for the year.
Optimism is on the horizon for Kagem, however. Gemfields resumed in-pit mining operations in May this year, and coupled with improving market conditions, the company anticipates the “G-factor” figure will rebound to its long-term average of approximately 19%.
“While Kagem had a poor 2024, we remain committed to the transparency brought by the ‘G-Factor for Natural Resources’,” Gilbertson affirmed, reiterating the company’s dedication to open reporting. “We hope this candidness will encourage others to adopt the ‘G-Factor’, allowing host governments and their citizens to better understand the performance of the custodians of their resources.”
Gemfields’ ongoing commitment to the “G-factor” stands as a beacon for corporate responsibility in the extractive industries, urging a more open dialogue about the distribution of natural resource wealth and the vital role mining companies play in the economic fabric of their host nations.
