Zimbabwe: Foreign companies issued banking warning

By The Africa Report

Posted on Tuesday, 6 December 2011 14:01

Zimbabwe administration wants all foreign-owned mining houses to list in the Zimbabwe Stock exchange and terminate all offshore banking to improve the liquidity situation.

Currently, only two foreign mining firms – BNC and Falcon Gold – are listed on the ZSE with Zimbabwe Platinum Holdings and Caledonia Mining Corporation being listed on the Australian Stock Exchange and the Toronto Stock Exchange, respectively.

Another major gold producer, Metallon Gold, is listed on the Johannesburg Stock Exchange.

Deputy Prime Minister Arthur Mutambara told a mining stakeholders’ forum that it was unacceptable for mining houses to have primary listings and bank money elsewhere other than Zimbabwe.

“All mining companies must have a primary listing in Zimbabwe then secondary listing on JSE or London,” Mutambara said. 

“We don’t want companies that are banking in Europe…Bank with local banks so that the money you bank allows us to function as a country” he added.

Bank with local banks so that the money you bank allows us to function as a country

Zimbabwe’s mining sector is evolving into a dominant player in the country’s economy, accounted for two-thirds of last year’s exports. It is estimated it would contribute over 50 per cent of exports this year. It is expected to grow by 15.9 per cent next year.

The Chamber of Mines estimates that the mining industry requires between US$5 and US$7 billion over the next five years, of which Platinum requires $2,8 billion, gold $2,3 billion, coal $560 million nickel and chrome $280 million respectively.

Statistics show that between January and September, mining companies received loans, predominantly short-term, amounting to $157 million out of $2,6 million total banking sector loans.

This means that the industry has to look for offshore financing, but analysts say the perceived high-country risk rating has made it difficult for local companies to access long-term loans on international markets.

Chamber of Mines Zimbabwe president Winston Chitando told the same forum that despite having over 40 recorded minerals occurrences, Zimbabwe is under-explored.

The limited exploration done to date has not been using modern technology.

“There is therefore huge potential of new ventures arising from exploration activities,” he said.

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