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Canadian Mining and Metals Finding Balance May 02
Standard & Poors, May 2002
Abstract
The credit quality of Canadian mining and metals companies was challenged by low prices in the gold, uranium, nickel, zinc, and steel sectors, which led to financial results that were generally poor in 2001. The low prices were reflected in narrower margins and lower demand levels due to poor worldwide economic conditions. High energy costs early in 2001 exacerbated the problem, resulting in lower production levels as higher cost facilities were shut down. The generally strong financial profiles of the companies in this sector, however, have enabled most of these companies to maintain steady ratings. The outlook for 2002 is encouraging, with lower (although still volatile) energy costs. Pricing of gold has improved considerably in 2002, with expectations that it...
Companies mentioned in this report are: Falconbridge Ltd. (Old),Vale Canada Ltd.,Echo Bay Mines Ltd.,Rio Tinto Alcan Inc.,Xstrata Canada Corp.,Placer Dome Inc.,Teck Resources Ltd.,Teck Metals Ltd.,Barrick Gold Corp.,Agnico-Eagle Mines Ltd.,Rio Algom Ltd.,Alusuisse Group Ltd.,Cameco Corp.,IPSCO Inc.,ArcelorMittal Dofasco Inc.,Stelco Inc.,BHP Billiton PLC
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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