Current mining downturn not a ‘normal’ one — Moody’s
The ratings agency sees little chance of a prompt recovery.
Moody’s sees little chance of a prompt recovery. On the contrary, it expects physical supply/demand imbalance to widen further, leaving the mining industry in extremely weak conditions.
The continued rout in commodity prices that has severely hit the mining industry in the past year can’t be considered a “normal” cyclical downturn, but rather, an unprecedented one, says Moody’s in a new report released this week.
The ratings agency, which recently placed 175 energy and mining firms at risk of downgrades, said the current environment is forcing miners to make fundamental shifts in the way they operate.
“Stress on companies in the metals and mining industry could surpass what we saw during the 2008/2009 period,” the analysts note. “As a consequence, a wholesale recalibration of ratings is required.”
Rio Tinto's Mt Pleasant coal mine sold to MACH Energy
The Mount Pleasant thermal coal mine has found a buyer, with the sale going to MACH Energy Australia for $US224 million plus royalties on future coal sales.
Rio Tinto announced the binding agreement for the Hunter Valley asset sale this morning, which combined with the sale of its interest in the Bengalla Coal joint venture to New Hope Corporation, will amount to $US830 million, or $1.184 billion in agreed sales.
Aurizon, Asciano face 'the start of the squeeze' on mining contracts
Coal and iron ore miners could slash costs by more than $5 per tonne if they renegotiate transportation contracts with rail haulage groups like Asciano and Aurizon, new research from Macquarie has forecast.
Coal miners are likely to try and change their take-or-pay haulage contracts with rail haulage groups following the revelation last week by Aurizon that it is considering giving "contractual relief" to iron ore miners in Western Australia, including Karara Mining, Macquarie said.