PROFIT & LOSS

Moody's turns negative on mining

Moody’s Investors Service has revised its global outlook for the mining sector to negative from stable, largely on prospects for weaker demand for metals and cash flow pressures mainly at copper, zinc, nickel and aluminium producers.

Moody's goes negative on mining

Moody's goes negative on mining

"EBITDA and prices are decreasing as business and macroeconomic conditions weaken. They will remain higher than in pre-pandemic years but below the record-high levels seen in early 2022," said Barbara Mattos, senior vice-president at Moody's. 

The slowing economic growth across the globe is reducing the demand for metals and mining commodities, Moody's said. 

Energy and raw materials costs remain high, particularly in Europe, which will also reduce producers' margins and earnings of producers of base metals. 

Copper miners face earnings before interest, taxes, depreciation, and amortization (EBITDA) declines due to lower production volumes, lower prices and higher input costs. 

For precious metals, Moody's noted that gold and silver prices are both declining due to higher interest rates and a stronger US dollar. 

"Unlike other metals, market sentiment rather than fundamentals such as supply and demand, influences pricing in this industry creating a drop in producers' revenues," it said.

Global miners are tackling a mix of lower metals prices, mine input inflation, supply chain disruptions and rising capital costs.

Copper prices on September 23 fell to their lowest level in almost two months because of a strong dollar and concerns that metals demand will be hit by a sharp downturn in the global economy.

A growing series of reports, each focused on a key discussion point for the farming sector, brought to you by the Kondinin team.

A growing series of reports, each focused on a key discussion point for the farming sector, brought to you by the Kondinin team.

editions

Mining Journal Intelligence Investor Sentiment Report 2024

Survey revealing the plans, priorities, and preferences of 120+ mining investors and their expectations for the sector in 2024.

editions

Mining Journal Intelligence Mining Equities Report 2023

Access an exclusive, inside look on the quarterly mining IPOs and secondary raisings data and mining equities performance tables with an annual Stock Exchange Comparisons supplement.

editions

Mining Journal Intelligence World Risk Report 2023 (feat. MineHutte ratings)

A detailed analysis of mining investment risks across 121 jurisdictions globally, built on 11 ‘hard risk’ metrics and an industrywide survey.

editions

Mining Journal Intelligence Global Leadership Report 2023: Social licence

Gain insights into social licence trends and best practices from interviews with 20+ top mining company executives and an industrywide survey.