(Reuters) – Gemfields & # 39; shares fell more than 4 percent Friday after it said Zambia & # 39; s Revenue Authority (ZRA) had received warrants to search Kagem's emerald green mine in an investigation into alleged tax evasion .
In May Zambia, the Canadian miner First Quantum Minerals hit with a tax bill of more than 76.5 billion Zambian kwacha ($ 8 billion) after a separate investigation.
In a statement at the Johannesburg Stock Exchange, Gemfields said that the Zambian Revenue Authority (ZRA) guaranteed two searches during an unannounced visit to Kagem Mining. The search warrants were served at Kagem and another company – Limpopo Polygraphs (LPCC) – a South African company that performs pol ygraph tests on Kagem.
Documents and files described by Gemfields as "extended" were seized, including allegedly "… used by Kagem Mine Ltd. / Limpopo Polygraphs CC for the payment of VAT, income tax, withholding tax and other taxes to evade ".
Gemfields estimated that the total value of all the work carried out so far by LPCC for Kagem was less than $ 7.5 million. "Gemfields will provide further updates as relevant information becomes available," it said in the statement.
The development is part of a broader attempt by the Zambian government, elsewhere in Sub-Saharan Africa, to improve the tax collection of mining companies operating in its border. First Quantum Minerals said on 31 July that it had provided documents to the ZRA following a tax assessment of $ 8 billion in March based on "… import duties, fines and interest on consumables and spare parts" dating back to 2013.