Kudzanai Gerede Business Correspondent
Mining firms will now operate in the country without being compelled to list on the local stock exchange as Government intends to repeal stringent business requirements in line with its open for business policy, Post business has learnt.
Discomfort had gripped the mining sector following the new mining and minerals bill tabled before Parliament recently, showing all mining firms were required to list on the local bourse in order to boost investment and local ownership of the country’s vast 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,” reads the bill, further stating that there will be a liability of a fine equivalent to 100 percent of the cash rose at the foreign listing or as much as 10 years in prison for non-compliance.
Mining lobby group, the Zimbabwe Chamber of Mines had earlier expressed reservations to the proposals in the bill with regards to compulsory listing citing low capitalization levels at the local bourse as not feasibly sufficient enough to sustain this highly capital intensive sector.
However, speaking at the Chatham House event in London recently, Foreign Minister Dr Sibusiso Moyo was quoted by Reuters saying, “Previously there was an indication that the new Mining Act would have a requirement to list on the local exchange but we can assure you that this qualification will be taken out.’’
Analysts have applauded Government’s heed to calls from industry groups to scrap off the listing requirement.
Zimbabwe Chamber of Mines economist Mr Pardon Chitsuro in a telephone interview, told Business Post that they engaged Government over the compulsory listing on the securities exchange and Government is yet to make an official statement.
“I have read about it but as an industry body we await Government statement for us to comment since we are in discussion with them,” he said.
The latest pronouncements by the Foreign Minister brings relief to most mining firms who are struggling to access funds to recapitalize operations and is expected to liberalize sourcing of capital from external markets at a time the local bourse was too lean with a modest market capitalization of just $ 9 billion.
Government has identified the mining sector as a key economic driver yielding about 65 percent of all foreign currency generated by the country and has thus been restructuring the sector and expediting the finalisation of the mining and mineral bill expected to be complete this month.