LONDON Miner Anglo American's (AAL.L) new chief executive told shareholders on Friday he had begun a three-month strategy review, promising that after years of largesse across the industry, the mining group would "spend within its means".
Mark Cutifani, who stepped down as boss of bullion miner AngloGold (ANGJ.J) to move to Anglo at the start of the month, replaced Cynthia Carroll. She was one of several mining bosses to leave the industry this year amid the sharpest income drops in a decade and hefty writedowns on boom-year purchases.
An Australian engineer and one-time miner, Cutifani gave little away in his maiden address to the company's investors.
He said his review - due to be completed by the time the group announces first-half results in July - would include Anglo's allocation of capital and technological innovation, hinting he could also make changes in the group's management.
However, Cutifani stopped short of repeating the promises of rivals who - under pressure from investors smarting from losses and soaring costs - have said they will not pursue acquisitions and would shy away from developing new projects from scratch.
Anglo itself has specifically been criticised for projects like the Minas-Rio iron ore development in Brazil, hit by cost overruns and delays.
"We cannot over-simplify the issues by attributing poor performance to one or two philosophical mantras," he told shareholders, blaming the industry's woes on "a lack of capital discipline, a lack of focus on returns and incapacity to translate good intent into business results".
"In Anglo American, we take full responsibility for addressing that issue."
Cutifani, who got a warm reception from investors in London, has taken on what analysts and investors describe as one of the toughest jobs in the mining industry, with challenges ahead including the restructuring of Anglo's platinum business, squeezed by weak prices and restive unions.
"Anglo remains in our minds a turnaround story," analyst Paul Gait at Sanford Bernstein said in a research note.
"One that will challenge Mr Cutifani, but one which we believe is solvable for a leader with his 36 years of operational expertise."
Earlier on Friday, Anglo said output of its key commodities edged higher in the first three months of the year, with iron ore rebounding from a damaging strike at its South African Kumba Iron Ore (KIOJ.J) unit last year.
Platinum remained a weak point as expected, however, with equivalent refined production down 2 percent to 583,000 ounces, hit by drops at South African underground mines where it has seen intermittent illegal strike action.
In an indication of the difficult turnaround ahead, the group signalled platinum cash costs of around 16,500 rand per ounce for 2013, at the top end of previous forecasts.
Anglo, which is planning to slash jobs and mothball mines to return its Anglo American Platinum (AMSJ.J) unit to profit, is in consultation with the government and unions, locked in talks that were extended to April 30.
It expects to refine and sell between 2.2 million and 2.3 million ounces of platinum in 2013, subject to the overhaul.
Iron ore accounted for almost half the group's annual profit and the unit showed an improvement after strikes battered its Kumba Iron Ore (KIOJ.J) unit. Output came in slightly lower than analysts had forecast at 10.3 million tonnes for the quarter, up 2 percent year-on-year, but still showed a 15 percent improvement on the last three months of 2012.
But copper and coal provided brighter spots, with copper one percent higher at 170,400 tonnes, beating expectations of a drop in the red metal given operational woes, as the ramp up of its Los Bronces mine offset lower production at Collahuasi in Chile.
Export metallurgical coal also beat expectations, rising 23 percent to 4.6 million tonnes.
A poor performance from diamonds and nickel however, with diamonds undershooting at just 3 percent improvement, and nickel production almost halving after the company was forced to cease operations at its Venezuelan Loma de Niquel mine.
(Reporting by Clara Ferreira-Marques; Editing by Paul Sandle and Leslie Gevirtz)