Anglo American Plc (AAL.L), which broke with tradition when it set up a focused commercial unit, sees modest improvements ahead after an early boost to profits, as it gets closer to clients, even offering shelter from volatile markets with fixed-price contracts.
Anglo, like many miners, shied away from directly trading its own material for decades, selling instead largely through intermediaries such as established trading houses.
That changed in 2013 under Chief Executive Mark Cutifani, as Anglo sought a direct connection with customers to get more value from every tonne of material sold, a move which added more than $400 million to underlying operating profit in two years.
The value of sales made to intermediaries – and not direct to end users – fell from 60 percent in 2012 to less than 10 percent of the total in 2015 – roughly the current level, according to Peter Whitcutt, the Anglo veteran who became chief executive of marketing a year ago.
The group is now close to the limit of the extra cash it can squeeze out per tonne sold, Whitcutt said in an interview last week. But it can still get closer to the needs of commodity end-users, particularly in opaque markets like thermal coal, or targeted markets like minor platinum group metals.
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