LACK of a reliable gemstone auction floor in Zambia has forced local producers to sell the precious stones on the foreign market.
THE lack of a reliable gemstone auction floor in Zambia has forced local producers to sell the precious stones on the foreign market, an Australia-based lapidiary expert Michael Andresse has said.
Mr Andresse said there was an urgent need by the Government and all stakeholders to invest in the establishment of an auction floor which will showcase Zambia's potential in gemstone production.
The auction floor once operational, would help to prevent capital flight as there was no guarantee that those firms selling gemstones especially emeralds on foreign auction floors, will bring back into the country the money realised from such transactions.
He said by establishing an auction floor locally, Zambia would attract the highest foreign bidders who would bring in foreign exchange as opposed to a situation where Zambia has been losing millions of Kwacha annually, because the money realised from the gemstone sales abroad does not come into the country's coffers.
"The presence of an auction floor is what is lacking in Zambia and this has forced major producers to sell their product in foreign countries.
"This has robbed the country of the much-needed revenue," he said.
Mr Andresse, who is in Zambia on holiday, is currently offering expertise to local small-scale miners in Lufwanyama District to help them understand how to add value to the gemstones.
Emeralds and Semi-precious Stones Mining Association of Zambia (ESMAZ) president Dale Litana said there was need for the Government to seek stakeholders' input in addressing the problem on why the already existing gemstone auction houses were white elephants.
Mr Litana said there was the Lapidary Centre and the Sub-Sahara Gemstone Centre in Ndola which were supposed to act as auction houses but they were now white elephants due to a combination of various factors.
"The authorities should make sure that they create a one-stop centre which will provide the facilities needed for the efficient and transparent sale of emeralds and other gemstones," he said.
According to Mr Litana there was need for the Zambia Revenue Authority, the Ministry of Mines, commercial banks and the customs authorities among others, to be stationed at the auction house which should be a one-stop shop if Zambia was to have an internationally-recognised gemstone auction floor.
He said President Michael Sata's call to have emeralds and other gemstones mined within the country auctioned locally was welcome but there was need to revisit the law to have legal backing for the operation auction houses in Zambia.
Mr Litana, however, observed that currently, there was no law compelling gemstones mined in Zambia to be auctioned locally.
And the Zambia Association of Manufacturers (ZAM) chief executive officer Roserta Mwape said there was need for Zambia's gemstone mines to start trading locally as they produce some of the world's highest grade emeralds which were being sold in India and Brazil among other markets.
"It is possible to have facilities to auction gemstones locally because they are of the highest grade and locals and foreigners who are serous about buying emeralds and other gemstones can come and do their transaction right here in Zambia," she said.
Ms Mwape said there were many options to be considered on the best way to auction gemstones in Zambia.
She said one of the options which could be considered was the introduction of quota system which could among others things, enable local jewellery manufactures to access the high grade gemstones which they were being forced to buy from foreign auction houses.
The Government could also come up with measures aimed at discouraging the export of unpolished gemstones to promote the growth of value addition industries which could be of great benefit to the country.
Ms Mwape said opening auction houses in Zambia would greatly benefit the country because the money earned from trading at auction houses would remain within the country, the jewellery manufacturing sector and other value addition industry would be opened and the sudden increase in international gemstones merchants would also boost the tourism industry.
And the Zambia Chamber of Commerce and Industry (ZACCI) vice-president in charge of the northern region Raj Karamchand said auctioning gemstones locally would see the country gain in terms of foreign exchange.
Mr Karamchand said concerted efforts from the Government and other stakeholders it was possible to open auction houses where the trade in gemstones could be suastained.