Fitch downgrades outlook on miners BHP, Rio Tinto

LONDON, June 10 (Reuters) - Rating agency Fitch downgraded its outlook on BHP Billiton (NYSE: BBL - news) and Rio Tinto (LSE: RIO.L - news) from stable to negative, after revising down its price assumptions for iron ore, copper and nickel earlier this month.

BHP Billiton, the world's largest mining firm, held its A+ rating but Fitch said on Wednesday the spin-off last month of some of its assets into a new company named South32 (Berlin: 32Z.BE - news) would have a marginally negative effect on its credit rating in the near term, weighing on projected free cashflow generation.

The outlook downgrade on A- rated Rio Tinto, the world's second-largest mining firm, was on the back of weaker price expectations for iron ore, its main product.

"Although Rio Tinto benefits from a leading iron ore cost position, the high percentage of revenue and (earnings) generated by that single commodity exposes the company to significant risks," Fitch said in a statement.

The rating agency confirmed its negative outlook on BBB- rated group Anglo American (LSE: AAL.L - news) .

Despite some positive developments such as the delivery of first production from its large Minas Rio iron ore project in Brazil, and a quick ramp up at its platinum mines in South Africa after a protracted mining strike last year, high debt remained an issue for the firm.

"Elevated leverage, which was driven by the intensive capital spending of previous years remains a primary risk, in our view, and is reflected in the negative outlook," Fitch said. (Reporting by Silvia Antonioli; editing by Susan Thomas)