Harare — Zimbabwe wants mining firms to list on the local bourse as part of efforts under new president Emmerson Mnangagwa to boost investment and local ownership of its vast mineral resources, a new bill before parliament showed.
Mnangagwa, who took power in November when the military ousted Robert Mugabe after nearly four decades, has vowed to revitalise the economy and unlock investment in the mining sector after years of reticence by foreign investors.
"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.
Companies seeking rights to mine in the platinum-rich country but already listed elsewhere must notify the mines minister and use the funds from such public offers to develop the mine in Zimbabwe, the bill adds.
A failure to comply would mean a liability of a fine equivalent to 100 percent of the cash raised at the foreign listing or as much as 10 years in prison.
The bill also proposes that miners use local banks to facilitate transactions, and to jail executives who do not comply.
"Every holder of a mining right or title shall, when conducting financial transactions relating to its mining activities, utilise financial institutions registered to practise as such in Zimbabwe in terms of the Banking Act [Chapter 24:20] or any related legislation," reads the bill.
"Any person who contravenes subsection (1) shall be guilty 40 of an offence and liable to a fine not exceeding level fourteen or to imprisonment for a period not exceeding twenty years or to both such fine and such imprisonment."
Industry lobby group, Chamber of Mines, said its members were not opposed to the proposal to list on the local bourse but warned that exchange may not be deep and liquid enough for companies to raise capital.
"Our members are not averse to listing on the local bourse but it has no capacity to meet the needs of the members," chief executive Isaac Kwesu said.
"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, Bindura Nickel Corporation, Falcon Gold, Hwange Colliery and RioZim, are listed on the Zimbabwe Stock Exchange, which has a market capitalisation of around $8 billion.