Moody’s Investors Service has put the credit ratings of 55 mining companies under review, due to poor market conditions, noting this downturn – unlike the prior ones – marks an “unprecedented shift” for the mining industry.
The agency points out the slowing growth in China has weakened demand for commodities, sending prices to multi-year lows and increasing the credit risk for mining companies.
“China’s outsized influence on the commodities market, coupled with the need for significant recalibration of supply to bring the industry back into balance indicates that this is not a normal cyclical downturn, but a fundamental shift that will place an unprecedented level of stress on mining companies,” Carol Cowan, a Moody’s senior vice-president, states in a release.
The strong U.S. dollar has also contributed to the deteriorating demand and softer prices, as most metals are traded in U.S. dollars, the agency adds.
The current review focuses on miners within the A1 to B3 rating range …
Read the complete article at NorthernMiner.com/news/moodys