Panel explores relevance of listed market for mining capital
The world is infinitely more complex now, with the energy transition, longer lead times and geopolitical fracturing, than in previous years and this presents challenges and questions around mining equity investment, as this is no longer as simple an exercise as before.
This was one of the areas explored by speakers during a panel discussion on the second day of the London Indaba on June 26.
A question currently is whether the listed market is still the right vehicle for the sector, as miners oftentimes struggle to find capital.
Some elements that are posing challenges in this regard include there being regulatory “overkill”, the industry having a scale problem and the amount of specialist mining funds decreasing.
Moreover, a new challenge that has emerged is that access to raw materials is becoming an issue of national security, which could partially explain the evolution of sovereign wealth funds becoming involved in mining, with this trend expected to continue, it was posited.
More positively, however, it was indicated that markets were undertaking reforms, including changing the listing rules to streamline listing for companies.
Also, there is advocating around markets taking a renewed look at corporate governance.
To bring more capital back into the market, it was suggested that initiatives could include trying to enfranchise retail investors.
Also, if companies do list to attract investment, the importance of ensuring accountability and transparency was emphasised.
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