By Matabeleland North Correspondent
Mines Minister Pours Cold Water On Vic Falls Stock Exchange
VICTORIA FALLS: Mines Minister Winston Chitando has poured cold water on the Victoria Falls Stock Exchange (VFEX)’s quest to attract mining companies for listing on the new bourse saying the financial market sector should first commit to investing in mine exploration work.
Finance Minister Mthuli Ncube Friday launched the VFEX amid high hopes it will attract international companies particularly mining companies from SADC and the Sub Saharan region.
However, only SeedCo International has shown interest and listed on VFEX.
Chitando and Industry Minister Sekai Nzenza accompanied Ncube to Victoria Falls for the launch of the United States dollar-denominated bourse.
However, the mines minister said there was a need to realign the language and thinking in the financial sector.
“The language in the financial sector is that mines are doing exploration hence banks and stock exchanges don’t fund exploration,” he said.
“In my own personal view, the markets are not aligned with the aspirations of the industry and to some extent, the language used also is not aligned to the needs of raising funding for the industry. Sometimes the rhetoric is that companies are doing exploration and financial services fear risks to invest claiming the company will be doing exploration. That should change as it is basically mining and not exploration,” said Chitando.
He also challenged the capital market to fund mining companies for them to expand their businesses.
“The stock market should be able to fund mining companies. In that way, there is a very minimum, if any, risk but the unfortunate reality is that the financial services sector and capital markets are not aligned to that.
“There is need to realign the language and thinking. I challenge the capital market in the country and the mining industry to get together and realign terminology and realise the opportunities.
“To the board and management of the Victoria Falls Stock Exchange in particular and the capital market in the country in general, let’s get closer and realign,” said Chitando, whose ministry is currently working on amending the Mines and Mineral Act.
He said the country was also losing out because of the lack of harmony.
“Unfortunately, the development of the country is constrained because of the lack of that appreciation. A lot of opportunities that the financial and capital markets are shying away from is compromising not only the profits that should accrue but also compromising the development of the country.”