Moody’s left South32’s Baa1/P-2 issuer rating and P-2 short-term commercial paper rating unchanged, albeit with a negative outlook, reflecting downside risk to metals prices.

“The confirmation of the Baa1 rating reflects Moody's expectation that South32 will continue to maintain a conservative financial profile with very low financial leverage and absolute debt levels,” Moody’s vice president and senior credit officer Matthew Moore said.

“The confirmation also reflects the agency's view that the announced cost and capital spending reductions combined with the company's payout based dividends will allow for free cashflow generation in the current weak commodity price environment.”

South32 has an enviable balance sheet with debt of just $US36 million at the end of January, down from $402 million at June 30.

Moody’s said South32’s balance sheet was well-placed to withstand industry pressures, though the company’s “scale, profitability and returns” were expected to remain at weaker levels than its peers.

Last month, South32 posted a $1.7 billion half-year loss, due to impairments, and announced job cuts of 4500 by the 2017 financial year to cut costs.

Around 1750 jobs will likely go in the current half, including around 800 in Australia.

South32 shares are up by around 47% this year, including by 1.3% today to $A1.57.