UPDATE 1-Anglo American boss to flesh out miner's recovery plan
* CEO's strategy update due on Dec. 12
* Expected to focus on operational improvements
* Targets 15 pct return on capital employed by 2016
* Shares down 20 percent since April
LONDON, Dec 6 (Reuters) - Four months after branding Anglo American's performance "unacceptably poor", Chief Executive Mark Cutifani is to tell investors on Thursday how he plans to improve the miner's operations and hit ambitious 2016 performance targets.
Anglo, the smallest of the leading diversified miners, has long lagged behind its peers. In the past two years alone it has been hit by labour troubles in South Africa, operational hiccups at key copper mines and multibillion-dollar cost overruns in Brazil.
Expectations have been high for Australian mine engineer Cutifani, who was credited with significant changes, operational nous and political acumen during his time in charge of South African bullion miner AngloGold.
At the end of July, less than four months after taking the helm, he said Anglo American would target a return on capital employed (ROCE) - a measure of the value a company gets out of its assets - of more than 15 percent by 2016.
Analysts say that could be a tough target after ROCE fell to 11 percent in the first half of the year, leaving it needing an extra $3.5 billion a year to hit target.
Cutifani said in July that the shortfall would be covered by cost savings, a reduced project pipeline, better performance and possibly asset sales, but he offered little detail.
That will come on Thursday, when he is expected to focus on operational improvements rather than dramatic change.
The meeting was scheduled for Tuesday, but the company moved it to avoid a clash with the planned memorial service for Nelson Mandela due to take place in Johannesburg.
Over the past decade, Anglo has underperformed its peers by more than 50 percent. Since April, even with optimism over the new management team, Anglo has traded at a discount to the broader sector and its shares have fallen by more than a fifth.
But the road to recovery will be steep for a company that has more than doubled total capital employed since 2007 but seen its rate of return on that capital more than halved.
"Anglo has lost some support from investors over the past few years. You have to give (a CEO) at least a couple of years," Investec analyst Albert Minassian said.
Investors will be particularly keen to hear on major projects such as the $8.8 billion Minas Rio iron ore operation in Brazil, which has suffered dramatic delays and cost overruns. Spending plans have increased more than threefold.
Minas Rio is now due to begin production at the end of 2014, a date analysts and some investors feel is still too optimistic. Anglo should take the opportunity to revise, rather than disappoint, they argue.
"At the end of the day, what can Anglo control? They can't control prices, they can't control politics. What is in their control? How they structure their business, but also what the market expects," Jefferies analyst Chris LaFemina said.
Cutifani's update is expected to outline improvement plans for Anglo's five key mines - Sishen (iron ore), Los Bronces and Collahuasi (copper), Jwaneng (diamonds) and Mogalakwena (platinum) - under the watchful eye of Tony O'Neill, a new appointee brought in from AngloGold.
Deutsche Bank analysts estimate that a turnaround for existing "problem mines" could contribute at least 40 percent of the targeted $3.5 billion boost to operating profit.
Anglo will also need to present a plan for its Kumba Iron Ore business. A big profit contributor for the past four years, Kumba's volumes have shrunk of late, while rivals Rio and BHP Billiton have boosted output.
Only after these operational problems are addressed can Anglo move on to more radical measures, such as a much-debated exit from Anglo American Platinum.
Though some investors have argued for its disposal, Anglo could rue such a move a few years down the line. "We could be looking at Anglo having got rid of this business at the absolute bottom of the cycle," said LaFemina at Jefferies.
Anglo is also expected to detail further plans to cut back its pipeline of undeveloped projects, such as Peruvian copper project Quellaveco.
Analysts at Deutsche Bank said that unapproved projects, which also include the Jacare and Morro Sem Bone nickel deposits in Brazil, thermal coal deposit Elders in South Africa and diamond project Gahcho Kue in Canada, could be deferred, cancelled or sold.