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Canadian Metals and Mining: The Credit Implications of Global Expansion Aug 04
Standard & Poors, Aug 2004
Abstract
Canadian metals and mining companies are entering a phase of significant international expansion, as they seek to develop deposits to meet fast-expanding global demand. The sector is currently enjoying strong cash flow stemming from a surge in consumption and pricing for their products. In addition, limited capacity additions in the past several years are intensifying the rally in metals pricing, as inventories have plummeted and consumers perceive a dearth of incremental supply over the next 12-18 months. As existing metals reserves in low-risk areas are depleted, these companies are forced to explore and develop resources in higher risk political areas and increasingly difficult operating and geological environments. These factors raise several key credit concerns, including an increase in political, construction,...
Companies mentioned in this report are: Falconbridge Ltd. (Old),Vale Canada Ltd.,Rio Tinto Alcan Inc.,Xstrata Canada Corp.,Placer Dome Inc.,Barrick Gold Corp.
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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