THE Zimbabwe Stock Exchange (ZSE) has engaged five mining companies to immediately consider listing on the bourse in a move expected to inject US$10 billion on the exchange.
Informed sources said the ZSE sub-committee on business development chaired by veteran stockbroker Geoffrey Mhlanga is pushing the Chamber of Mines of Zimbabwe to encourage mining companies operating in Zimbabwe, but listed elsewhere, to float shares on the local exchange.
Sources say the ZSE is targeting platinum giant Zimplats, which is trading on the ASX, Aqaurius platinum (ASX, JSE, LSE), Anglo American owned Unki mine, and ACR — trading on the LSE.
This development comes after Wednesday’s meeting in the capital where the ZSE enticed mining companies to buy into the broad-based empowerment drive by listing on the exchange.
The ZSE, which has a market capitalisation of just over US$3 billion, is constituted of mainly industrial counters with only four mining concerns out of the 76 listed trading companies.
The four listed mining companies — Bindura, Falgold, Wankie and RioZim — are currently accounting for just over US$105 million of the ZSE’s value.
“The ZSE feels that it is unfair for mining companies whose finite resources are in Zimbabwe to trade outside our borders,” a source close to the development said.
“The committee is encouraging five mining companies to take the empowerment initiative by going public on the ZSE. The decision to go public also removes this foreign-controlled tag attached to mining companies. Should the mining companies buy into this proposal, the committee expects the quality listings to add US$10 billion to the bourse.”
The ZSE, according to the source, also argued that listing mining companies would also be able to utilise long-term cheap and “patient” capital for mines and subsequently grow exploration investment.
“The mining companies could also gain a high market profile whilst at the same time improving on performance and operational discipline,” the source further said.
Efforts to get a comment at the time of going to print yesterday from Chamber of Mines of Zimbabwe president Victor Gapare were in vain as his mobile phone continued to ring unanswered.
Government, on the other hand has criticised mining companies for making an insignificant contribution to the fiscus, which resulted in a downward revision of growth projections of the mining sector to 31% from 40%. Government downgraded growth projections despite an anticipated bullish metal and mineral run on the world market.
The mining industry, which started the year on a high of 209,8 points, plunged to 131,45 by Wednesday due to lack of liquidity triggered by a flight of foreign investors following the gazetting of indigenisation regulations compelling foreign-owned companies to dispose of controlling interests to black Zimbabweans by 2015.
Zimbabwe has over 40 base minerals and the world’s third largest platinum deposits after South Africa and Russia.