Investigating the technical, financial and regulatory challenges in the Zambian gemstone mining sector: a case study of gemcanton investment holdings limited
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In Zambia, copper mining has largely overshadowed the exploitation of other potential minerals. Recent developments have shown that, gemstone mining, namely emeralds and amethysts have begun to assume a significant role. In the past two decades, Zambia has become one of the major gemstone producing country accounting for approximately 40% of the world‘s emerald production. With the strong and ever increasing demand of gemstone on the world market, sourcing of gemstones has become one of the industry‘s biggest challenge. In Zambia, there are over 500 gemstone licences, of which majority has not advanced technologically due to several factors such as technical mining and geological factors; lack of finances; regulatory and instructional frameworks and others, hindering its development. Consequently, this limitation has an effect on the social development of the gemstone sector and the national economy at large. The main objective of this study was to investigate the technical, financial, regulatory and other challenges affecting the gemstone mining sector in Zambia. A case study of Gemcanton mine (formally, Grizzly Mining Ltd) was used for the investigation. The data was collected through administration of questionnaires, interviews, observation and available data from various sources. The results from the study have shown that the prevailing technical challenges within the study area include: extreme difficult in defining the orebody (resource/reserve estimation); the presences of induced cracks in gemstones; lack of appropriate mining equipment; lack of geological and mining skills in most of the mines; limited area for mine development and expansion as well as dumping areas; and poor occupational safety standards. In terms of financial context, the challenges that were observed are: lack of start-up capital; lack of working capital; lack of credit facilities; Lack of collateral; lack of marketing; lack of financial statements by gemstone miner; lack of business and management skills; and price fluctuations. The regulatory structures revealed challenges such as difficulties in land accessibility, poor infrastructure in the mining sites in terms of roads and electricity, lack of marketing strategies for gemstones in Zambia, smuggling of gemstones and legal recognition. Therefore, it can be concluded that there are quite a number of factors affecting the growth of gemstone mining in Zambia with the most prevailing being in association high geological risks aforementioned above. Furthermore, lack of start-up capital appears to be another key challenge being faced by gemstone sector. In view of the notable challenges encountered in the gemstone sector, this study recommends that there is need to review the mineral resource policy established in 2013 in line with the seventh national development plan on exploitation of gemstones and industrial minerals in Zambia.
The University of Zambia
- Mines