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ROCKY AND ROUGH

29th January 2016

By: Martin Creamer

Creamer Media Editor

  

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There is a lot of bearish talk in mining right now as the Chinese economy slows down more rapidly than expected, low commodity prices drive down prospects and profit growth looks far off. Mining assets are being subjected to the words ‘sell’, ‘close’, ‘downsize’ and ‘cut’, as mining-company CEOs resist going to the market to raise more equity and do all they can to keep their balance sheets intact through self-help. But mining analysts at Liberum warned last week that the threat of capital call is weighing on the shares of even the biggest of the big mining companies. Slashing capital expenditure and reducing dividends to zero might still be insufficient to retain the topmost credit ratings to which some have committed themselves. The road remains rough and rocky and fortunes are continuing to go down.

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