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At the Minas Rio project’s port of Açu on the Atlantic coast, a 300 tonne Cantitraveller crane is engaged in incrementally launching the port jetty which, on completion, will be 2.9 km in length, including 400 m on land.

Unlocking further value from the portfolio

In 2009, further initiatives were put in train to drive shareholder value. An important element is the Group's asset optimisation programme which aims to unlock value from existing assets and achieve project delivery excellence through ongoing cost and productivity improvements.

Another significant initiative has been the formation of a streamlined supply chain in order to capitalise on the scale of the Group and to deliver cost savings by forming strategic global partnerships with key suppliers. Already in 2009, the Group's asset optimisation and procurement programmes have delivered more than $1.6 billion ($1.4 billion from core operations) of benefits, ahead of expectations. The $2 billion asset optimisation and procurement targets are expected to be reached from core operations alone by 2011.

To ensure delivery of the sustainable growth required from Anglo American's portfolio and to achieve the efficiencies and performance required to outperform its competitors, a far-reaching restructuring of the Group was announced at the end of 2009. This has enabled it to become a more effective, efficient and agile organisation, with increased clarity over decision making and greater speed of implementation.

The new structure creates a focus on operational performance and project delivery through seven business units focused on the core commodities in the portfolio and located in the areas of key geographic focus for each commodity. These are: Anglo Platinum (South Africa), Iron Ore Brazil, Kumba Iron Ore (South Africa), Copper (Chile), Nickel (Brazil), Metallurgical Coal (Australia) and Thermal Coal (South Africa).

The reorganisation has resulted in a lean corporate centre focused on activities that increase shareholder value beyond that which the commodity business units could achieve alone. These include providing overall strategic direction and governance, establishing and maintaining common processes and standards, and helping to transfer best practice, capturing economies of scale and facilitating synergies in key value driving functions, such as procurement, asset optimisation, project management and logistics.

Towards the end of 2009, Anglo American announced its intention to divest of the following assets: international steel products manufacturer Scaw Metals, Brazilian phosphates producer Copebrás and ferroniobium producer Catalão, as well as the Group's portfolio of zinc assets. Together with Tarmac, already identified for divestment, these assets accounted for approximately 13% of 2009 Group EBITDA. The proceeds of these divestments, which will be timed to maximise value, will help to strengthen the balance sheet and to deliver the Group's world class projects.

In 2009, four major bond transactions raising a total of $5.9 billion refinanced the Group's short term debt position. Simultaneously, capital expenditure for 2009 was cut by more than half, though not at the expense of the Group's most important growth projects.

Further progress continues to be made to focus the Group on its core mining portfolio. During 2009, Anglo American disposed of investments considered as not being core to the Company's strategy for the future, including its residual 16.2% shareholding in AngloGold Ashanti for $1.8 billion, realising a total of $2.4 billion.

During the first quarter of 2010, Anglo American agreed the sale of Tarmac's aggregates businesses in France, Germany, Poland and the Czech Republic and its Polish concrete products business, with expected total proceeds of approximately $400 million.

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Annual Report 2009