SA is known for its abundant mineral wealth and renowned for having one of the oldest and most skilled mining industries globally.
The JSE has 39 mining companies listed now. Three of these are suspended from trading and one is in business rescue , leaving 35 actively trading. Of those, there are only six that are true exploration or development companies. This compares with more than 2,000 listings on the two Canadian stock exchanges of mining companies, for example.
Historically, several reasons are to be blamed for SA’s declining number of listings, including red tape, high costs and low valuations. Coming back to the dearth of listed exploration and mining companies though, the issues run far beyond these reasons. Of the six JSE-listed junior mining and exploration companies that we have analysed, only one had institutional shareholding of more than 20%, with the rest ranging between 2% and 18%. These companies rely on international retail investors, high-net-worth individuals or private equity for funding, and most of these types of investors are located outside SA.
Another notable trend was that none of the six firms analysed had their primary listings on the JSE. Their primary listings were on the Australian Stock Exchange, the London Stock Exchange or the Toronto Stock Exchange, with secondary listings on the JSE.
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