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Gemfields assembles ‘The G-Factor for Natural Resources’
Gemfields Group Limited
Incorporated in Guernsey. Guernsey registration Number: 47656.
South African external company registration number 2009/012636/10
Share code on JSE:GML / AIM:GEM
ISIN: GG00BG0KTL52 | LEI: 21380017GAVXTCYS5R31
("Gemfields" or the "Company")
Gemfields assembles ‘The G-Factor for Natural Resources’
LONDON, 13 JULY 2021
Gemfields today invites collaboration, input and support from governance bodies, mining organisations,
industry observers and host governments in adopting the ‘G-Factor for Natural Resources’, a new measure
promoting greater transparency regarding the level of natural resource wealth shared with the governments
of host countries.
The G-Factor for Natural Resources is intended to be an uncomplicated indicator of the percentage of a natural
resource company’s revenue that is paid to the host country government in primary and direct taxes, plus -
where the host government is a shareholder - dividends. As such, it is an indicator of the share of natural
resource wealth paid to a host country’s government.
The G-Factor for Natural Resources would typically be calculated by each standalone company engaged
primarily in the extraction and sale of natural resources, whether in the mining, oil, gas, timber or
fishing sectors. Accordingly, multi-national natural resource companies would publish the G-Factor for
Natural Resources for each operating subsidiary engaged primarily in the extraction and sale of natural
resources.
The G-Factor for Natural Resources takes its name from the “g’s” in “government”, “governance” and “good
practice”, with a passing nod to “Gemfields”.
Sean Gilbertson, Gemfields’ CEO, commented:
“In an era witnessing significant strides in transparency and governance, and where extensive reporting on so many facets of
corporate activity is already required in the annual reports of public companies, it is surprising that practical parameters allowing
more direct insight into, and comparison of, the sharing of natural resource wealth still elude us. We invite collaboration, input
and support for the adoption of the ‘G-Factor for Natural Resources’ as a step forward. We hope it will be voluntarily adopted
by other companies, insisted upon by host countries and incorporated into projects such as EITI.”
The G-Factor for Natural Resources is expressed as a percentage and is calculated as:
Ap + Bp + Cp
Dp
where:
- A = the total mineral royalty (tax on revenue) paid by the reporting company to the host country
government during the period
Gemfields Group Limited, Royal Chambers, St Julian’s Avenue, St Peter Port, GY1 4HP, Guernsey
- B = the total corporation tax (tax on profit) paid reporting company to the host country
government during the period
- C = the dividends paid by the reporting company to the host country government during the period
(where the host country government is a shareholder in the reporting company)
- D = the total revenues of the reporting company during the period
- p = the relevant period, typically calculated for each of (i) the prior year; (ii) the preceding 5 years
and (iii) the preceding 10 years
- The sums actually paid during the period (rather than the sums accrued or falling due during
the period) are used for the purposes of A, B and C.
No measure of this type is perfect and it is recognised that:
a. the G-Factor for Natural Resources is a “rule-of-thumb” – while it has broad application and is a
practical indicator, it is not suited to every situation;
b. there are numerous additional and indirect taxes which are not included in the G-Factor for Natural
Resources and which further increase the contribution made to host nations by natural resource
companies. Such taxes include but are not limited to area/surface charges, social security
contributions, taxation on the salaries of employees, import and export duties, VAT, etc; and
c. the variety and variations in natural resource deposits, types and occurrences lessens the ability to
make direct comparisons between companies.
G-Factor for Natural Resources computations for Gemfields’ two key mining subsidiaries (the Kagem emerald
mine in Zambia and the Montepuez ruby mine in Mozambique) are set out below:
Montepuez Ruby Mining Limitada G-Factor (1 Year) G-Factor (5 Years) G-Factor (10 Years)
(Mozambique), USD million 2020* 2016-2020 2011-2020*
(A) Mineral Royalties Paid 1.2 49.1 60.0
(B) Corporation Tax Paid 13.6 80.4 90.7
(C) Dividends to Government (if applicable) n/a n/a n/a
(D) Total Revenue 0 438.9 589.8
G-Factor, being (A+B+C)/D n/a 30% 26%
* Notes: As a result of Covid- Mining commenced 2012.
Revenue excludes other income or revenue generated 19, MRM had no Sales commenced 2014.
from other sources. revenues in 2020.
Tax payments were
however made ‘on
account’ as required
by Mozambican law.
Kagem Mining Limited G-Factor (1 Year) G-Factor (5 Years) G-Factor (10 Years)
(Zambia), USD million 2020 2015-2019 2011-2020
(A) Mineral Royalties Paid 1.4 25.2 41.4
(B) Corporation Tax Paid 2.4 35.9 61.5
(C) Dividends to Government (if applicable) 0.0 8.5 12.5
(D) Total Revenue 27.7 294.4 626.2
G-Factor, being (A+B+C)/D 14% 24% 18%
* Notes: Gemfields acquired a 75%
interest in Kagem in 2008.
-ENDS-
Further information on Gemfields Group Limited can be found at:
GEMFIELDSGROUP.COM
To join our investor mailing list, contact us on:
companysecretary@gemfields.com
For any press enquiries please contact us on:
gemfields@camarco.co.uk
ENQUIRIES
GEMFIELDS
Sean Gilbertson / David Lovett / Mark Lawrie
T: +44(0) 20 7518 3400
SPONSOR (JSE) Investec Bank Limited
SEDIBELO SALE PROCESS
Liberum
Nehal Patel
T: +44(0) 20 3100 2222
NOMINATED ADVISER
finnCap
(AIM) & JOINT BROKER
Christopher Raggett / Tim Redfern / Edward Whiley
T: +44(0) 20 7220 0500
JOINT BROKER
Liberum
Clayton Bush / Scott Mathieson / Kane Collings
T: +44(0) 20 3100 2222
FINANCIAL PR/ IR
Camarco
Gordon Poole / Nick Hennis
T: +44(0) 20 3757 4980
ADDITIONAL INFORMATION ON GEMFIELDS
Gemfields is a world-leading supplier of responsibly sourced coloured gemstones. Gemfields is the operator
and 75% owner of both the Kagem emerald mine in Zambia (believed to be the world’s single largest
producing emerald mine) and the Montepuez ruby mine in Mozambique (one of the most significant
recently discovered ruby deposits in the world). In addition, Gemfields also holds controlling interests in
various other gemstone mining and prospecting licenses in Zambia, Mozambique, Ethiopia and Madagascar.
Gemfields’ outright ownership of Fabergé - an iconic and prestigious brand of exceptional heritage - enables
Gemfields to optimise positioning, perception and consumer awareness of coloured gemstones, advancing
the wider group’s “mine and market” vision.
Gemfields has developed a proprietary grading system and a pioneering auction and trading platform to
provide a consistent supply of coloured gemstones to downstream markets, a key component of Gemfields’
business model and has played an important role in the growth of the global coloured gemstone sector.
GEMFIELDS
GEMFIELDS.COM | INVESTORS |FOUNDATION
INSTAGRAM | FACEBOOK | TWITTER | YOUTUBE
FABERGÉ
FABERGÉ.COM | INSTAGRAM | FACEBOOK | TWITTER | YOUTUBE
KAGEM MINING LINKEDIN
MONTEPUEZ RUBY MINING LINKEDIN
Date: 13-07-2021 08:00:00
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