Moody’s cited ERG’s ‘standalone credit strength’ through the reduction of its debt and improvements in its financial metrics including EBITDA and liquidity levels as a major factor for the upgrade.
The rating agency also noted a number of other contributing factors for the upgrade, including:
- ERG’s access to high quality mining assets and its competitive cost structures;
- strong operational and product diversification;
- the solid market position it commands in EMEA for ferrochrome, iron ore and aluminium;
- the 90% share of exports in total revenue and the strength and diversity of its customer base.
Moody’s also indicated the high likelihood of further improvements in ERG’s credit profile in the next 12-18 months - in particular, following the forthcoming commissioning of the Metalkol Roan Tailings Reclamation (RTR) project, a comprehensive low-cost hydro-metallurgical facility to reprocess old cobalt and copper tailings in the Democratic Republic of the Congo.
Alexander Machkevitch, Chairman of the Board of Directors at ERG, said: “The second consecutive credit rating upgrade represents an important positive milestone in the Group’s ceaseless commitment to strengthening its operations across all of its key regions. As a result of the hard work and dedication of ERG’s highly professional and solid team, and with a continued focus on efficiency, ERG has achieved strong financial results and will continue to strive to do so. The outlook on both ERG’s credit profile and the wider commodities market is positive, and on that basis we believe we will remain at the forefront of the global mining industry.”