Mining giants circle VFEX

STAFF WRITER

The Victoria Falls Stock Exchange (VFEX) is fast emerging as a magnet for mining capital, with resource firms showing unprecedented appetite to list on the bourse, a development that could elevate it into one of Africa’s most significant stock exchanges.

Already, Caledonia Mining Corporation, platinum miner Karo Mining Holdings and Invictus Energy are listed on the US dollar-denominated platform, alongside the suspended Bindura Nickel Mine. Each new entrant has strengthened the VFEX’s standing as the continent’s premier foreign currency securities market and a hub for investors seeking stability and hard-currency returns.

For Zimbabwe, a country long plagued by currency volatility and fragile investor confidence, the VFEX represents a bold attempt to restore credibility and integrate more deeply with global capital markets.

Launched in October 2020, the VFEX was designed as part of government’s strategy to transform Victoria Falls into an international financial services hub.

By operating entirely in hard currency, it shields investors from Zimbabwe’s inflationary shocks and exchange-rate fluctuations that have historically undermined the Zimbabwe Stock Exchange (ZSE).

Comparable offshore centres such as Mauritius and Botswana have successfully leveraged their exchanges to attract global capital. Yet, VFEX is unique in being fully dollar-denominated, giving it a clear niche advantage in the region.

Since inception, it has broadened its listings beyond mining to include financial services, hospitality, tourism and clothing. Mining, however, remains the primary engine of momentum.

Speaking at the Chartered Governance and Accountability Institute of Zimbabwe (CGI Zimbabwe) Summer School in Bulawayo last week, VFEX head of Markets Robert Mubaiwa confirmed that interest from mining houses is accelerating.

“If you see the information that we are sharing with the market, there is more appetite for new funds as mining houses are showing keen interest coming to the market or to list with us,” Mubaiwa said.

He highlighted the exchange’s track record of efficiency, underpinned by a flawless settlement system.

“Since 2020, every trade that has gone through the stock exchange has been settled on time without delay. That is a confidence booster,” he noted.

For capital-intensive industries like mining — where exploration, extraction and processing demand hundreds of millions of dollars with long payback periods — such assurance is vital.

Mubaiwa outlined how several listed firms had already raised substantial funding through the VFEX.

“For instance, Caledonia raised local funds to the tune of US$12m, Karo raised US$36m and US$25m came from local funds. Eagle Reit raised about US$19,5m and Invictus raised US$12m,” he said.

These examples demonstrate the platform’s ability to mobilise both domestic and international capital for large-scale projects. Importantly, Mubaiwa stressed transparency and governance as prerequisites for investor participation.

“What we have seen on projects is that the projects have to have a clear rationale for investors to invest. People have to understand protection mechanisms in the project and the transparency of the project,” he said.

This emphasis on investor safeguards is critical, particularly for institutional funds which demand clarity on governance, financial disclosure and risk management before committing capital.

Mining contributes more than 60% of Zimbabwe’s export earnings, with platinum, gold, chrome, diamonds, lithium and coal as key drivers of foreign currency inflows. Yet the sector is inherently capital-hungry.

New mines require vast upfront investments, while existing operations constantly seek fresh financing to expand production or modernise equipment. Bank lending alone is insufficient, making capital markets indispensable.

By drawing mining houses to list, VFEX positions itself as a strategic hub for Zimbabwe’s resource-driven growth.

Success here could also ripple across the economy — deepening financial markets, boosting tax revenues, creating jobs, and strengthening supply-chain linkages.

VFEX is not only competing with the ZSE but also with well-established African bourses in Johannesburg, Nairobi, Lagos and Mauritius. Each has carved out niches, but VFEX’s dollar-denominated model sets it apart for investors wary of local currency risk.

If it succeeds in attracting more regional mining firms, VFEX could position itself as a credible alternative to the Johannesburg Stock Exchange (JSE) for resource listings. Such a development would enhance Zimbabwe’s regional financial influence while cementing Victoria Falls as an offshore investment hub.

Despite the promise, long-term success hinges on consistent governance and regulatory stability. Investor confidence remains fragile given Zimbabwe’s history of policy volatility and capital controls.

The VFEX’s flawless trade settlement record is a solid foundation, but wider policy consistency, including taxation frameworks and dividend repatriation rules — must remain investor-friendly.

Liquidity also remains relatively thin compared to more established exchanges, limiting the appetite of large institutional investors. Growing market depth is therefore essential to unlock meaningful global participation.

Still, the early successes — from Caledonia’s US$12m raise to Eagle Reit’s US$19,5m issue, prove the model works. With sustained policy stability and strengthened governance, VFEX has the potential to evolve from a niche bourse into a continental powerhouse.

For Zimbabwe, such a transformation would be far-reaching. Anchored on transparent, dollar-denominated markets, the country could chart a sustainable path out of financial isolation and into regional prominence.