Fitch: Downturn affects South Africa mining

Fitch Ratings said in a report that South Africa's mining output is expected to decline further during 2009 on the back of the global economic downturn.

Companies that may be affected include Impala Platinum Holdings Ltd., which is rated BBB+/AA(zaf) with negative view; AngloGold Ashanti Ltd., which is rated AA-(zaf)/F1+(zaf) with stable view; and Harmony Gold Mining Co. Ltd., which is rated BB/BBB-(zaf) with stable view.

Weak demand for gold, diamonds, copper, iron ore and platinum is expected to continue in the short-term, with a recovery in demand and market conditions not expected prior to 2011, the agency said.

The adverse effects of the downturn are expected to worsen across emerging market economies during 2009, including South Africa, as reduced exports and continued negative quarterly GDP growth impact credit profiles of manufacturing and mining companies, Fitch said.

Companies that continue to display stronger cash generation, retain conservative debt profiles and focus on liquidity management are better positioned to cope with the impact of the downturn, the agency said.

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