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17 February 2012 | Angeline Albert
Anglo American has recognised the
contribution of procurement to help the company mitigate the impact of falling
demand and extreme weather on profits.
According to the international mining group,
effective cost management had lessened the impact of production disruption on
profits. Problems included disruption to operations caused by extreme weather
and safety stoppages, industry-wide cost pressures and economic uncertainty
that led to a fall in commodity prices at the end of 2011. This affected
operating profit and resulted in lower production volumes and in higher unit
costs of production across the group.
“The impact of this negative global trend
was mitigated by the continuing positive performance of our embedded asset
optimisation and procurement programmes,” said the company’s annual results
The financial report revealed a 14 per cent
rise in operating profit to £7 billion ($11.1 billion) compared with 2010 at
"Anglo American delivered an
impressive financial and operational performance in 2011, as we continued to
capture the benefits of operational improvements and disciplined cost
management," said CEO Cynthia Carroll.
Exports of metallurgical coal, used in the
production of steel, fell by 9 per cent in 2011 compared to the previous year,
primarily as a result of heavy rainfall and subsequent flooding around the
start of last year in Australia. Copper production was 4 per cent lower than in
2010 due to extreme wet weather and operational issues at Collahuasi in Chile.
Diamond production also decreased by 5 per cent reflecting the impact of
maintenance and excessive rainfall in southern Africa during the first half of
The company also issued a warning for the
year ahead: “Costs are likely to continue to be affected by strong producer
currencies and increasing prices for key inputs.”