Platinum Producers Challenge Zimbabwe’s Local Listing Plan

The government of Zimbabwe has outlined plans to enforce miners to list on the local exchange, but platinum producers oppose the idea as they believe it will stifle their ability to invest and grow.

Impala Platinum Holdings (JSE:IMP), Zimbabwe’s top platinum producer, is the biggest advocate against the potential changes.

Johan Theron, a spokesman for the Johannesburg-based company, noted that Impala has little interest in listing on the local exchange, as investors in the country can already trade Zimplats shares listed on the Australian Securities Exchange.

“A local primary listing would only be feasible with the requisite in-country capacity to raise the required capital and sustain daily trading volumes in the equity. Much work still needs to be done before the economy can structurally support this,” he added.

Additionally, Anglo American Platinum (JSE:AMS), the world’s biggest producer of the metal, said it will “seek to work with the government to ensure the law takes account of industry views and leads to growth in the mining industry.”

The proposed plan, which would be enforced through the Mines and Minerals bill, was announced last week in the hopes that it will create an influx of money to help fix the economy.

The Zimbabwe government stated, “[n]o 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.”

According to the bill, the government requests that 85 percent of the funds from the local listing to be used exclusively to develop the local right. Currently, companies extracting platinum and diamonds are already subject to 51-percent local ownership.

Platinum and diamonds are key exports for Zimbabwe’s economy, which has been drastically reduced since 2000, following a volatile land-reform program introduced by former ruler Robert Mugabe.

In the hopes of finding an alternative to the government’s proposal, Impala plans to study other options to bring in local investment. The company is also working on a community and employee share-ownership plan, with each group holding 10 percent of Zimplats.

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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.