Global credit rating firm Standard and Poor's downgraded Wednesday its outlook on Anglo American PLC to negative from stable as a result of growing concerns about the effects of South Africa’s mining strikes on the company's mining operations and on the wider economy.

S&P said in a statement that "Our view is that Anglo American's business risk profile is weakening because of rising South African country risks.” The announcement followed last week's downgrade of South Africa's sovereign-debt rating to triple-B from triple-B-plus with a negative outlook.

S&P said last Friday that “In our view, the strikes in South Africa's mining sector will likely feed into the political debate in the run-up to the 2014 elections, which may increase uncertainties related to the African National Congress' future policy framework.”

The ratings agency also said it expected that country’s underlying social tensions would increase spending pressures and reduce fiscal flexibility for South Africa’s government.

Source - www.mining.com

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