[SYDNEY] Freeport-McMoRan Inc, the copper miner battling through a metals rout, had its credit rating cut to junk by Standard & Poor's less than a month after Moody's Investors Service did the same.
S&P on Friday lowered the rating by two levels to BB from BBB- and said the outlook for the company's new rating is negative. Shares of the Phoenix-based company, which also produces oil, have tumbled 72 per cent over the past 12 months.
While the company has been cutting costs and output to cope with tumbling prices, the plan is "tempered by uncertainties in the commodity markets and the risks inherent in metals and mining that could derail or delay a recovery for Freeport in 2016," the ratings agency said in a statement. In late January, Moody's lowered its rating four levels to junk status, citing a "fundamental shift in the operating environment."
Mining companies are struggling to pay down debt with prices for most commodities stuck near multi-year lows amid slowing demand from China, the world's biggest consumers of metals, grains and energy. S&P said it lowered it expectations for 2016 copper prices by 13 per cent to US$2.10 a pound. Futures in New York reached US$1.9355 on Jan 19, the lowest since 2009.