JOHANNESBURG (miningweekly.com) – Multinational mining major Anglo American is “clearly” on track to deliver on the turnaround promises made to shareholders at the start of the year, with the company in a “much better” position than it was six months ago.

Unpacking the mining giant’s financial results for the six months ended June 30, CEO Mark Cutifani on Thursday told analysts and media during a conference call that the group is delivering 12% more production than it did in 2012, with 35% fewer assets and 40% fewer employees.

“We have got a lot of work ahead of us . . . [however,] if the first half is any indication [of progress], I would not bet against us,” he commented.

During the half-year under review, Anglo American strengthened its balance sheet through capital cost and discipline and decreased its net debt by $1.2-billion to $11.7-billion before closing its agreed disposal proceeds.

The company is wrapping up some $1.5-billion in noncore disposals initiated in the first half of the year, including the niobium and phosphates businesses in Brazil.

The proceeds of the sale of the assets will bring net debt to $10.3-billion.

“The decisive actions we have taken to strengthen the balance sheet put us well on track to achieve our net debt target of less than $10-billion at the end of 2016 – both through stringent capital and cost discipline and improved operational performance (and assuming the completion of announced noncore asset divestments),” Cutifani noted.

Despite facing severe commodity price headwinds, Anglo continued its transformation into a more resilient business, with a core portfolio of De Beers, platinum-group metals and copper.

In the six months under review, the dollar basket price for platinum was down 24%, metallurgical coal down 23%, copper down 15%, diamonds down 14% and iron-ore down 10%.

The falling realised prices across most products had a $1.2-billion first-half impact on earnings before interest and taxes, which decreased 27% to $1.4-billion, partially offset by incremental cost reductions and a $900-million gain from weaker producer country currencies.

Anglo reported a 23% decrease in underlying earnings to $700-million and a 23% decline in earnings a share to 0.54c during the six months under review.

The group’s loss before tax narrowed 81% from $1.9-billion in the six months to June 2015 to a $364-million loss in the first half of 2016.

“Sharply lower prices across our products were mitigated by our self-help actions on costs, volumes, working capital and capital expenditure (capex), together contributing to the $1.1-billion of attributable free cash flow generated in the first half of 2016,” Cutifani said.

While Anglo only achieved $300-million of cost and volume improvements in the first half of this year, it expects to end the year with a $1.6-billion improvement in cost and volume.

Further, Anglo reduced its capex from $2-billion in the first half of 2015 to $1.2-billion in the six months to June 30.