By Business Reporter & Agencies
THE government has ditched new proposals which would compel mining companies to list on the Zimbabwe Stock Exchange (ZSE), a cabinet minister revealed Monday
The proposal is contained in the new mining act proposed by President Emmerson Mnangagwa’s government.
According to a new bill before parliament, the proposal was aimed at boosting investment and local ownership of the country’s mineral wealth.
“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,” the bill says.
However, according to Reuters news agency, foreign affairs minister Sibusiso Moyo revealed Monday that the requirement had been dropped.
“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,” Moyo said speaking at a Chatham House event in London.
Under the proposals foreign companies seeking to mine in Zimbabwe were required to notify the mines minister of their listing plans and to also use the funds from such public offers to develop the mine in the country.
Failure to comply would attract a fine equivalent to 100 percent of the cash raised from the foreign listing or even 10 years in prison.
The Zimbabwe Chambers of Mines had expressed its reservations over the proposal, indicating that the listing idea may not work in a struggling economy where investment is also elusive.
“Our members are not averse to listing on the local bourse, but it has no capacity to meet the needs of the members,” said Chamber Chief Executive Isaac Kwesu when the proposal was announced.
“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.”
Four mining companies, including Canada’s Falcon Gold and diversified local miner RioZim, are listed on the local stock market.