OREANDA-NEWS. This announcement corrects the version published earlier today, which incorrectly stated Anglo American Plc's IDR.

Fitch Ratings has revised the Outlook on BHP Billiton Plc/Ltd's (BHPB) Long-Term Issuer Default Rating (IDR) to Negative from Stable and affirmed the IDR at 'A+'. Fitch has also revised the Outlook on Rio Tinto Plc/Ltd's (RT) IDR to Negative from Stable and affirmed the IDR at 'A-'. We have also affirmed Anglo American Plc's IDR at 'BBB' with a Negative Outlook. A full list of rating actions is below.

The rating actions follow an industry review, which included an analysis of forecast operational and financial profiles for each company over the next three to four years and incorporated Fitch's new price assumptions on major commodities. On 8 May 2015 we revised down our price assumptions for iron ore, copper and nickel, while revising zinc upwards.

KEY RATING DRIVERS
BHPB
BHPB's operational profile which has superior product diversification compared to the broad industry with exposure to the high margin oil business, places it at the higher end of the 'A' rating category. However funds from operations (FFO) adjusted gross leverage is expected to remain above our 1.5x downgrade trigger in 2015-2016 and beyond despite the expected price recovery for iron ore and oil. This is a key reason for our change in Outlook to Negative.

In May 2015 BHPB completed the demerging of South32, a new mining company that will be involved in coal, aluminium, manganese, silver and nickel production. Fitch assesses the near-term effect of South32's spin-off on BHPB's credit profile as marginally negative owing to weaker projected free cash flow (FCF) generation and a modest increase in FFO adjusted gross leverage after the demerger. However, BHPB will benefit from a streamlined business structure and better average position on the commodity cost curve, which will help the company navigate the depressed commodity prices environment.

Fitch expects the company to retain a strong profit margin during the forecast period with the EBITDA margin above 40%. Moderate capital spending versus previous years should add to the company's ability to remain free cash positive through the cycle.

RT
The affirmation of RT reflects Fitch's view that the company's financial profile remains commensurate with the lower end of the 'A' rating category. The revision of the Outlook to Negative reflects our expectation that the company's leverage will remain above 2.5x during 2015-2016, the years of weakest iron ore prices under Fitch's assumptions. Fitch expects the company to remain FCF negative during most of the forecast period despite the relatively limited projected capital spending programme.

Although RT benefits from a leading iron ore cost position, the high percentage of revenue and EBITDA generated by that single commodity exposes the company to significant risks.

Anglo American
The affirmation of Anglo American reflects Fitch's view that the company's business profile remains strong and commensurate with the higher end of the 'BBB' rating category. The agency acknowledges operational achievements at some of the group's key projects such as the commissioning of Minas Rio, the restructuring of its platinum business to ramp up production after output was negatively affected by a strike, and profitability improvement in the nickel and diamonds divisions.

However, Anglo American's financial profile and in particular financial leverage, corresponds to the lower range of the 'BBB' rating category. 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. In 2015-2016, we expect Anglo American's FFO adjusted gross leverage to remain above 3.0x. The pace of deleveraging is likely to be slower than we previously expected. The company has also been largely FCF negative and is expected to remain so during 2015-2016.

We will continue to closely monitor the company's deleveraging through the commodity price cycle. If there is no progress in leverage moving below 3.0x by 2018, when Fitch expects iron ore prices to start recover, then we could take negative rating action.

Rating differentials among the three miners continue to be driven by comparative profitability levels and operational factors such as commodity mix and diversification, and the cost position of operations. In this respect, BHPB continues to be positively differentiated from its peers by its ownership of substantial and profitable oil & gas operations. Also, while each of the three global mining companies are meaningful producers of iron ore, copper and coal, at present, BHPB's and RT's still sufficiently profitable iron ore operations are substantially larger than those of Anglo American.

Liquidity and capital market access remain strong for BHPB, RT and Anglo American, and do not represent major differentiating factors.

KEY ASSUMPTIONS
Fitch's key assumptions within our rating case for the issuers include:
- Gradual production ramp up at Minas Rio (Anglo American) to 26.5mtpy of iron ore by 2017
- Slower pace of infrastructure capacity increase at Pilbara iron ore mines of both Rio Tinto and BHP Billiton with lower capex incurred
- Stabilisation of annual capital spending at approximately USD4bn for Anglo American, USD6.5bn for Rio Tinto and USD9bn for BHPB
- Negative effect on profitability in 2015/2016 caused by the weak price environment on major commodities, especially iron ore, should be partly compensated by operational efficiency improvements and local currency devaluation versus USD in main production countries (Australia, Canada, Brazil, South Africa, Chile, and Colombia)
- Price assumptions for selected commodities: iron ore (USD50/t in 2015- 2016, USD60/t in 2017 and USD70/t long term), aluminium (USD1,850/t in 2015-2016, USD2000/t in 2017 and USD2,250 long term), copper (USD6,000/t in 2015-2016, USD6,500/t in 2017 and long term), nickel (USD15,000/t in 2015, USD16,500/t in 2016, USD18,000/t in 2017 and USD19,000 long term), WTI crude oil (USD50/t in 2015, USD60/t in 2016, USD75/t in 2017 and long term).

RATING SENSITIVITIES

BHP
Positive: Future developments that could lead to a revision of the Outlook to Stable include:
- Sustained FFO adjusted gross leverage at or below 1.5x (FYE14: 1.47x)
- Sustained FCF margin above 3% supported by lower shareholder distributions or capex payments

Negative: Future developments that could lead to negative rating action include:
- Inability to maintain FFO adjusted gross leverage less than 1.5x by end-2018
- Inability to maintain EBITDAR margin above 40% on a recurring basis (FY14: 45.6%)

RT
Positive: Future developments that could lead to a revision of the Outlook to Stable include:
- Sustained FFO adjusted gross leverage at or below 2.0x (FYE14: 2.02x)
- Sustained positive FCF supported by lower shareholder distributions or capex payments

Negative: Future developments that could lead to negative rating action include:
- Inability to maintain FFO adjusted gross leverage below 2.0x by end-2018
- Sustained negative FCF

Anglo American
Positive: Future developments that could lead to a revision of the Outlook to Stable include:
- Completion of the group's current portfolio restructuring programme, including full production at key development projects (e.g. Minas-Rio iron ore), leading to a sustained increase in profitability and cash flow margins
- Sustained FFO adjusted gross leverage at or below 3.0x (FYE14: 3.67x)
- Sustained EBITDAR margin over 30%
- Sustained positive free cash flow

Negative: Future developments that could lead to negative rating action include:
- FFO gross leverage being sustained above 3.0x by end-2018 while EBITDA margin remains below 25% with no evidence that FCF reverses to positive

FULL LIST OF RATING ACTIONS

BHP Billiton Plc/Ltd:
Long-term IDR: affirmed at 'A+'; Outlook revised to Negative from Stable
Senior unsecured debt: affirmed at 'A+'
Short-term IDR: affirmed at 'F1'

BHP Billiton Finance (USA) Ltd:
Senior unsecured debt guaranteed by BHPB: affirmed at 'A+'

BHP Billiton Finance Ltd:
Senior unsecured debt guaranteed by BHPB: affirmed at 'A+'

WMC Finance (USA) Ltd:
Senior unsecured debt guaranteed by BHP Billiton Olympic Dam Corp Pty Ltd and BHP Billiton Nickel West Pty Ltd: affirmed at 'A+'

Rio Tinto Plc/Ltd:
Long-term IDR: affirmed at 'A-'; Outlook revised to Negative from Stable
Senior unsecured debt: affirmed at 'A-'
Short-term IDR: affirmed at 'F2'

Rio Tinto Finance (USA) Ltd:
Senior unsecured debt guaranteed by RT: affirmed at 'A-'

Rio Tinto Finance (USA) Plc:
Senior unsecured debt guaranteed by RT: affirmed at 'A-'

Rio Tinto Finance Plc:
Senior unsecured debt guaranteed by RT: affirmed at 'A-'

Rio Tinto Alcan Inc:
Senior unsecured debt: affirmed at 'A-'

Anglo American Plc:
Long-term IDR: affirmed at 'BBB'; Outlook Negative
Short-term IDR: affirmed at 'F2'

Anglo American Capital Plc:
Senior unsecured debt guaranteed by Anglo American Plc: affirmed at 'BBB'