West Africa Bourse Plans Mining Exchange to Ease Capital-Raising

August 24, 2016

West Africa’s regional stock exchange plans to start a separate section for mining stocks by 2018, a move aimed at making it easier for resources companies to raise funds in the local CFA franc currency, the head of the bourse said.

The Bourse Regionale des Valeurs Mobilieres, based in Abidjan, Ivory Coast’s commercial capital, is amending its regulations and aims to have a dedicated mining platform in place by 2018, General Manager Edoh Kossi Amenounve said in an interview by phone. The mining exchange will be open for companies exploring or operating mines in the region, he said.

The BRVM is in talks with the Toronto Stock Exchange to set up a “technical partnership” between the two bourses and will “take inspiration” from the Canadian mining-exchange model, Amenounve said. Discussions may be completed by the end of the year, he said.

“Mining companies operating in the region only raise funds in foreign currencies,” Amenounve said. “Some of them have approached us to see how they could raise the resources they need in local currency. Some have even asked us for a dual listing with the Toronto stock exchange, but the regulating framework isn’t compatible at the moment.”

Can’t Comply
Companies that want to sell shares on the bourse are currently required to provide certified accounts for at least two years, Amenounve said. Mining companies, which usually need funds as soon as they are created to start exploration, often can’t comply with those rules, he said.

The BRVM trades securities from eight West African nations, including gold exporters Mali, Burkina Faso and Ivory Coast, and the world’s fourth-largest uranium producer, Niger. The countries are part of the West African Economic and Monetary Union that uses the CFA Franc, which is pegged to the euro. The bourse is heavily weighted toward banks and telecommunications. A mining section would also enable local investors to put money into regional mining projects, Amenounve said. “We need local, African shareholders to invest in the mining sector.”

Countries in the region are trying to boost their mining industries. Burkina Faso, Africa’s fourth-biggest gold producer, is developing new gold and manganese mines, while Ivory Coast, which had long favored agriculture, aims to develop its untapped mining deposits, including gold and iron ore.

“Most of the countries of the region have significant mining deposits,” Amenounve said. “The development of the mining sector has been extremely important in the last few years. We want to support this development.” Source: Bloomberg