Anglo American has pathway to increase margins, returns and earnings to $400 million by 2016 with a new commercial model.

Anglo American has identified approximately 85% of the incremental EBIT necessary to achieve the level of return expected from the business and is working on the areas where there is additional potential. “Our commercial model, targeting a $400 million annual EBIT uplift by 2016, is up and running and already delivering enhanced margins” Mark Cutifani, Anglo American chief executive said at an analyst and investor strategy presentation on 12 December 2013.

“While I expect headwinds to continue in 2014 as we reset the business, the benefits of much improved operational processes and performance will flow through largely in 2015 and 2016. In the immediate term, we have already delivered significant sustainable improvements which we will detail today as a result of a number of measures, including early operational improvements, overhead reduction and reducing early stage project spend.”

The company has begun by rebuilding the management team which is accountable for delivering a step change in performance to achieve its target of attributable ROCE in excess of 15% on a sustainable basis by 2016.

“We have set demanding but achievable targets and we are determined to meet them by working efficiently and effectively to drive significantly greater value from our high quality asset base,” said Cutifani.