Dire Mining Warnings Come From Canada ‐January 2016‐
A ccording to the Bank of Merrill Lynch, two mining companies in British Columbia need to resolve their solvency issues in 2016 or face certain demise by 2017. In addition, the company singled out a third mining operation and warned them that they could face the same type of issues in 2018 if they continue on their current path. Thompson Creek Metals and Teck Resources were red flagged by Merrill Lynch as being in financial trouble if they do not make some difficult decisions during 2016. First Quantum Minerals Ltd was the third company that was named as having the potential for solvency issues by 2018. Teck Resources, British Columbia's most successful, largest and most diversified mining company, was also given the red flag by Cannacord Genuity during its evaluation of the 11 companies that it covers. These concerns that are being raised by the country's investment bankers ‐‐ Cannacord Genuity issued its only sell rating for those that it evaluated for Teck Resources ‐‐ seems to be an ominous measure of just how challenging the industry has become for Canada's mining companies. In contrast, though, a managing director of BMO Capital Markets mining equity research department, Andrew Kaip, noted that the same grim projections were made about Teck Resources during the financial crisis of 2008 and 2009. He stated that those predictions turned out to be false alarms as did similar cautions that were raised about huge gold companies, such as Barrick Gold Corp. According to Merrill Lynch's predictions, the company expects that China's continuing challenges in the financial arena as well as a strengthening US dollar
will combine to pull commodity prices downward. Merrill Lynch expects to see those figures begin an upward trend by the second half of 2016 though. Metallurgical coal is not expected to show upward gains until 2018.