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Emerald sellers, buyers slam Zambia auction ruling

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(Globalpost/GlobalPost)

A lack of buyers at a Zambian emerald auction on Tuesday raised doubts about the government's recent and controversial decision to ban foreign sales of the gems.

Around 24 of 31 Indian gemstone companies turned up to an auction in Lusaka, amid complaints from buyers that hosting auctions in the Zambian capital is impractical.

Zambia last week banned the selling of its gemstones abroad, a move that the government said was meant to protect the country from unscrupulous buyers and keep gem wealth in the country.

"Zambian gemstones have for a long time been sold on foreign markets, a situation that has contributed to capital flight and denied Zambians of the much-needed benefits from the resource," the ministry of mines said.

But that irked the organisers Gemfields -- which is part owned by the Zambian government -- and which has warned the decision will prevent producers from getting top dollar for the stones.

"We had invited 31 companies and seven will not make it which means that only 24 will attend," said Sean Gilbertson, the executive director of Gemfields, which controls most of the country's production.

"These companies are coming from India and to travel from there to here takes about 24 hours," he said.

"As you know Zambia is the third largest producer of emeralds and such a restriction would have seriously affected the growth of the emerald industry," he said.

An Indian investor, Jagdish Tambi, who runs KL Tambi and Company that produces tanzanite and emeralds, also complained the auction would not take place closer to India, where many buyers are from.

"We are not happy about this thing, I had to change three flights and the whole journey takes about 24 hours," he said.

"It was going to be fair if the auctioning was held in Singapore or Johannesburg and not here. Besides the travel complication there are some local traders pushing us to see their products and that is confusing," Tambi said.

The auction will close on Friday.

os-arb/rmb

http://www.globalpost.com/dispatch/news/afp/130416/emerald-sellers-buyers-slam-zambia-auction-ruling