Zimbabwe will compel mining firms to list on the local bourse, which has a market capitalisation of around $8 billion, as it seeks to increase investment and local ownership of its mineral resources.
“No mining right or title shall be granted or issued to a public company unless the majority of its shares are listed on a securities exchange in Zimbabwe,” Reuters reports citing a new bill before parliament.
A failure to comply would mean a liability of a fine equivalent to 100 percent of the cash raised at the foreign listing or as much as 10 years in prison.
Image credit: parlzim.gov.zw
The bill further states that firms looking for rights to mine in the country but already listed elsewhere should inform the mines minister and use the funds from such public offers to develop a mine in Zimbabwe.
Bloomberg quoted Impala Platinum as saying that the move to compel mining companies to list the majority of their shares on the local exchange was not feasible and would obstruct operators’ ability to grow and invest in their assets.
"A local primary listing would only be feasible with the requisite in-country capacity to raise the required capital and sustain daily trading volumes in the equity," said Impala spokesperson Johan Theron.
"We believe much work still needs to be done before the economy can structurally support this."
Chamber of mines chief executive Isaac Kwesu was quoted by Reuters as saying that their members were not opposed to the proposal but cautioned that the local bourse may not be liquid enough for companies to raise capital.
“Our members are not averse to listing on the local bourse but it has no capacity to meet the needs of the members,” he said.
“Mining is a capital intensive business and some of our larger mines are listed on foreign exchanges because they are able to raise large amounts for working capital and for investment.”
Platinum, gold and diamonds were key mineral exports for the Zimbabwean economy.