The company blames the cyclical downturn for its own profit downturn and, to be fair, it certainly is not on its own in that regard.

True, revenue was down, but only by 7% year on year, $15.5 billion this year as opposed to $16.8 billion in 2011.

CPI and mining sector-specific inflation hit costs.

Earnings before interest and tax were down 43% from $4.2 billion in 2011 to $2.4 billion this year.

The company has announced an interim 14c a share dividend.

Despite the downturns, Xstrata chief executive officer Mick Davis said 2012 was a landmark year for the company.

While he talks about the “distraction” of the company’s proposed merger with Glencore, he also mentions the “tipping point of the strategy to transform our portfolio through organic growth” the company has followed for the past five years.

“That strategy has already delivered long-life low cost operations with further embedded growth potential such as the Mangoola and Goedgevonden coal mines, Nickel Rim South and the expansion of the Antamina copper-zinc mine – all producing at or above name-plate capacity.”

Davis said the second quarter had been a better one for the company too.

“Coal and nickel volumes rose in the first six months compared to the previous year,” he said.

“Zinc volumes were maintained despite the imminent closure of Brunswick and Perseverance mines in Canada.

“However, the Tintaya and Ernest henry open pit copper operations contributed lower volumes as they reach the end of their lives.”

Xstrata also was hit by Argentine government measures in April that stopped its Alumbrera copper mine from selling to export customers in the second quarter. This blighted what had been an otherwise excellent period for the mine.

“Following the relaxation of restrictions, copper sales have resumed and the back-log will be fully recouped by the end of the year,” Davis said.

The company’s Collahuasi copper joint venture in Chile was stymied by ball mill failure, lower recoveries and planned lower grades.

“Recent performance at Collahuasi has been disappointing this mine is not yet operating in a manner that will allow it to fulfil its vast potential,” Davis said.

In reaction to this Collahuasi is coming under the joint management of Xstrata Copper and Anglo American to iron out the operational issues.

The mining sector inflation that has been adding to many a miner’s cost base also hit Xstrata.

Davis said the company had been affected by this but had still managed to cut unit costs in real terms by a net $105 million in the first six months of 2012.

The company’s nickel and zinc business units accounted for $87 million of those savings.

“Our transition to lower cost operations has already commenced in our nickel and coal businesses,” Davis said.

He is a big believer that top-down costs savings will not deliver the cost savings Xstrata seeks.

“Our approach to reducing costs is firmly rooted in the belief that our operational management are best placed to determine how to run their sites more efficiently,” Davis said.