Standard & Poor's Ratings Services has affirmed Indian miner Vedanta Resources' long-term corporate credit rating as 'BB'. The outlook is negative.
According to S&P's statement, the rating on Vedanta reflects the company's exposure to commodity prices, and country and operating risks in
India. Constraints include
iron ore mining restrictions, time-consuming approval processes, and changes in taxes and royalties. However, these weaknesses are tempered by Vedanta's good business diversity following the acquisition of its oil subsidiary Cairn in 2011.
The rating agency indicated that "recent restrictions on
iron ore mining in the state of Goa could have a material impact on Vedanta's EBITDA unless they are removed and production resumes to earlier levels over the next three months." The agency added that the negative outlook reflects the view that the ban on
iron ore mining could extend beyond the next three months.