eBusiness Weekly
Golden Sibanda
Zimbabwe may soon adopt legislation to compel mining firms with mining rights or title in the country to list the majority of their shares on the domestic stock market to foster accountability and enable locals to buy shares.
Mining is a strategic sector for Zimbabwe, generating about 60 percent of the mineral rich Southern African country’s exports.
Zimbabwe has over 40 mineral occurrences including gold, diamonds, platinum, nickel, chrome and lithium.
Currently, only four mining companies are listed on the Zimbabwe Stock Exchange (ZSE), which was founded in 1896. The mining stocks are diversified gold miner, RioZim, Bindura Nickel Corporation (BNC), coal extractor Hwange (HCCL) and gold miner, Falcon Gold Zimbabwe.
Some of the country’s mining firms with mining rights/title in Zimbabwe and are listed in foreign jurisdictions include Zimplats, which has a primary listing on the Australia Stock Exchange and HCCL; in which Government has majority stake, has a secondary listing on the Johannesburg Stock Exchange (JSE). Caledonia Mining Corporation, which operates Blanket Gold Mine in Gwanda, is listed on the Toronto Stock Exchange (TSX), in Canada.
Listing on an exchange follows strict rules of governance, which enhance transparency and accountability. This could help dispel some of Government’s suspicions about operations of some mining firms.
More importantly, listing on the domestic stock exchange will also allow flexibility for participation of locals.
The new provisions will also require companies listed on a foreign exchanges to declare the listings to the minister of mines.
It also directs that proceeds from external listings be used solely for development of mining assets domiciled in Zimbabwe.
This is contained in new provisions to the amended version of the Mines and Minerals Amendment Bill, which has already gone through its second reading in the Parliament of Zimbabwe. The legislation has been on the cards since 2015.
Mines and Mining Development Minister Winston Chitando said recently that the legislation was targeted to sail through remaining stages of Parliament and to be gazetted into an Act by end of this month. This deadline might be missed as some Parliamentarians have contested on constitution of the Mining Affairs Board, citing issues of possible conflict of interest.
Minister Chitando told legislators that a number of key provisions had been incorporated into the Bill, which seeks to repeal certain provisions of the current Act, promulgated in 1961 and was last amended about 22 years back.
Calls had previously been made by various stakeholders, including the ZSE itself, on the need for mining companies operating in Zimbabwe, particularly foreign owned conglomerates, to also consider listing their shares on the domestic stock market.
Minister Chitando said the Bill seeks to have mines listed on ZSE.
“The Bill seeks to provide that no mining right or title shall be granted or issued to a public company unless a majority of its shares are listed on a securities exchange in Zimbabwe,” he said.
“Any company that requires a mining right or title which is listed on foreign exchange outside Zimbabwe, shall be obliged to notify the minister of such listing and 85 percent of funds raised from such listing shall be used solely for the development of the mining rights and title in Zimbabwe,” he added.
Some of Zimbabwe’s mining companies, which are not listed at all include the country’s biggest gold miner, Metallon Gold Corporation, owned by South African magnet, Mzi Kumalo. Anglo-American unit, Unki Mine and Sibanye Stillwater and Implats jointly owned unit, Mimosa, are also unlisted.
The Minerals Marketing Corporation of Zimbabwe (MMCZ) in the past said Zimbabwe was losing out on cash flow into the country, due to mining firms that were not listed or listed externally.
MMCZ said mining companies listed in Sydney, Frankfurt, Canada and Johannesburg should be made to list in Zimbabwe first.
The State minerals marketing entity suggested that no mining company should be primarily listed on stock exchanges outside without being listed in Zimbabwe. It said Australia had done it and it was working wonders with billions of dollars and benefits flowing into the mineral rich country.
The Mines and Minerals Amendment Bill also seeks to insert provisions on environmental management, computerized mining title registration and management, procedures for conflict resolution between in mining, constitutions of the mining affairs body, new licensing system and beneficiation among others.
