The Brazilian iron ore and pellet producer, Samarco, reported the rating agency Moody’s has updated its company rating from B3 to B2, while the outlook of its perspective was upgraded from stable to positive.
According to Moody’s, the upgrade to B2 reflects the improvement in Samarco’s operating cash flows following the start-up of the second concentrator in December 2024, significantly increasing pellet production volumes from approximately 9.0 million mt to 15.0 million mt annually, while reducing cash costs.
The rating action also considers the conclusion of the renegotiation agreement reached in October 2024, which enhances the visibility of cash outflows over a 20-year horizon.
“The positive outlook reflects our expectation that Samarco’s operations will continue to improve as the company builds a track record operating two concentrators and reduces costs over time, further strengthening cash flow generation”, highlighted Moody’s.
Currently under judicial reorganization, derived from an accident with the Fundão rejects dam in 2015, Samarco is now operating its pellet production at a pace of 15 million mt per year, equivalent to half of its production capacity before the accident.
Full capacity is expected to be achieved by 2028.