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NEWS: Moodys says water issues could downgrade credit ratings of mining companies

MiningWeekly.com reports Moody’s Investor Service released a report in mid-February that noted “water scarcity could adversely impact on the ratings of of global mining companies if they failed to proactively manage the accompanying operational and political risks to their businesses.”

It warns that “tighter environmental permitting requirements” will mean higher operating costs, “political risk was likely to also increase as competition for water resources between mining companies and local populations intensified…”, and that “these factors to exert downward pressure on the ratings of the mining companies…”

“Moody’s pointed out that smaller, less diversified mining companies, particularly those with single-mine operations, in water-scarce regions, such as South America, were most vulnerable.”

The report titled ‘Global Mining Industry: Water Scarcity to Raise Capex (capital expenditure) and Operating Costs, Heighten Operational Risks’, is not available to the public through their website www.moodys.com. Moody’s Investors Service provides international financial research and, with Standard & Poor’s and Fitch Group, is considered one of the ‘Big Three’ credit rating agencies.

This is an important observation to be mindful of in terms of campaign strategies to stop investment (notably Canada Pension Plan investments) in water-destructive mining companies. For campaign information, please see our website ‘Water & Mining in Latin America’ at http://canadians.org/mining. The Council of Canadians has highlighted in campaign blogs that the CPP currently has $256 million worth of shares in Goldcorp and that the CPP Investment Board has been called on to support a resolution demanding that Goldcorp suspend its Marlin mine operations, http://canadians.org/blog/?p=6798.