Gold, diamond firms’ prospects good – Moody’s

MOODY’S Investors Service said yesterday that South African gold and diamond producers’ credit quality had good prospects to continue strengthening. Moody’s assistant vice-president, Douglas Rowlings, said the gold and diamond producers that the agency rated in South Africa had already reset their operations to prevailing price conditions and were decoupled from the weak environment. Rowlings said this was in contrast to base metal producers, where conditions were unlikely to improve meaningfully. “Challenging industry conditions should continue through 2018 at least for base metal miners, and each company’s ability to adapt their balance sheets to a lower earnings environment will continue to be a key consideration in ratings, as will liquidity and debt maturity profiles,” Rowlings said. Moody’s report, entitled “Metals and Mining – South Africa: Gold and Diamond Mining Companies Shine, But Base Metals Face a Slow Recovery”, was released yesterday. Mining employs 5 percent of the country’s formal workforce. Moody’s said the slowdown in base metals mining was credit negative for local firms. – ANA