Latin American metal and mining companies are better positioned than their global peers to withstand the pressures of the global downturn, Fitch Ratings said in a report Tuesday.

Fitch said their relative strength is due to higher earnings before interest, tax, depreciation and amortization, or EBITDA, as well as funds from operating margins and their healthy cash positions.

Comparing 2008 EBITDA margins, a key measure of profitability, Fitch listed six Latin American metals and mining companies with margins ranging between 24% and 55%, while outside the region only Tata Steel (500470.BY) was within this range. Its EBITDA margin was 43%.

The top four Latin American companies in terms of EBITDA margin in the iron and steel sector were the Brazilians: Samarco Mineracao, CSN (SID), VALE SA (VALE), and Usiminas (USIM5.BR), Fitch reported.

The region's metal and mining companies had certain similarities, Fitch said, including strong capital structures, ability to generate significant cash flow during cycle troughs and manageable debt payment schedules.

According to Fitch, their strong liquidity positions have limited debt refinancing needs and a consequent dearth of debt capital markets activity in the first half of 2009, Fitch said.

This contrasts with a 'plethora of bond issuances outside the region, by companies with higher refinancing needs,' Fitch noted.

Among those global companies with bond issuances worth a total of $22 billion between April and June, were Rio Tinto (RTP), ArcelorMittal (MT), Anglo American (AA), Goldcorp and Teck Resources.

"Defaults during the next 12 difficult months are unlikely, and covenants, particularly those that tie cash flow to equity or debts, could be breached by few companies," the report said.

-By John Kolodziejski; Dow Jones Newswires; 55-21-2586-8086; john.kolodziejski@dowjones.com