19 February 2010 | Jake Kanter

Substantial procurement savings could not halt Anglo American’s profits plummeting 53 per cent last year.

The mining giant’s annual results showed that net profits hit $2.4 billion (£1.6 billion) last year, down from $5.2 billion (£3.4 billion) in 2008. It blamed the global economic downturn for the drop in iron ore, export coal, nickel and diamond prices.

At the same time, the company saved $1.6 billion (£1.04 billion) in 2009 through improved procurement and asset management and is expected to make total accrued cutbacks of $2 billion (£1.3 billion) in these areas by 2011.

On purchasing alone, Anglo American smashed its $330 million (£214 million) savings target by $180 million (£117 million) last year. The firm said it used its scale to negotiate better deals and cut supplier numbers, forming partnerships with fewer vendors in categories including fuels and lubricants.

CEO Cynthia Carroll said: “Two areas of synergy where we are continuing to deliver clear and substantial value are in our asset optimisation and global procurement programmes.”