SA Mining Output Expected to Fall Further This Year - Fitch

Source:

". . .total mining production for the quarter was down 12.8%. . ."

The outlook for South Africa's mining output remained dim, with a recovery in demand and market conditions for commodities not expected to occur before 2011, ratings agency Fitch Ratings reported on Friday.

The agency expected the country's mining output to decline further during 2009, as a result of the global economic downturn, saying that weak demand for gold, diamonds, copper, iron-ore and platinum would continue in the short term.

Statistics South Africa on Thursday released the country's mining production statistics for March. The total mining production for March was down 4.6% year-on-year, while total mining production for the quarter was down 12.8%, compared with the quarter ended December 2008.

The mining companies that were continuing to display stronger cash generation, and that were retaining conservative debt profiles, as well as focusing on liquidity management, were better positioned to cope with the impact of the downturn, the agency noted.

Further, Fitch expected high input costs to persist during 2009 and into 2010, negatively affecting profitability of mining companies.

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