* Share price dips after rally this year
* All major miners have reported increased cash, reduced debt
* South African boost double-edges as rand strength adds costs (Adds quotes, analyst comment, context, updates share price)
LONDON, Feb 22 (Reuters) - Anglo American reported a 45 percent increase in annual earnings, halved its net debt and its head said the mining company was "fundamentally different" from during the commodity downturn.
All the major miners have recovered from the crash of 2015-16. Over the past two weeks, they have announced increased returns for shareholders and lower debt, while promising to avoid the spending sprees that contributed to the end of the previous boom.
Anglo American and Glencore -- which on Wednesday announced results it said were the strongest yet -- fell the furthest and have also rallied the most as commodity markets have recovered.
South African-focused Anglo has this year received a further spur from expectations that new President Cyril Ramaphosa will support the industry.
Anglo shares, which had risen more than 15 percent this year and outperformed rivals, fell nearly 4 percent by 0920 GMT as analysts said Thursday's results were vastly improved but missed some forecasts.
The company reported underlying EBITDA of $8.8 billion, a 45 percent increase year-on-year.
Anglo American said it had delivered free cash flow of $4.9 billion, a 93 percent increase, helping it to roughly halve net debt. It has also restored dividends that were scrapped during the downturn.
At the height of the commodity crash, Anglo American said it would greatly reduce its activities to focus on diamonds, platinum group metals and copper.
As the market improved, it said it was no longer a forced seller, but it has reduced its assets by 47 percent since 2012, while greatly increasing productivity.
"Very simply put, we have done what we said we would do," Mark Cutifani, Chief Executive of Anglo American, told reporters on a conference call.
He said for him most important of all was the improvement in productivity, which rose by 28 percent per person last year alone.
"Anglo American is a fundamentally different business. We are more resilient. We are more competitive. We are delivering solid returns," he said. "Our intention is to keep improving the business from the base we have established today."
Edward Sterck, analyst at BMO Capital Markets, which rates Anglo outperform, said the full-year profit was slightly light.
"Overall, the results are a little disappointing, but the company has demonstrated a significant year-on-year improvement and is clearly still walking down the path to redemption," he wrote.
One headwind for Anglo American is a strengthened South African rand, which has reached three-year highs, as a result of the replacement of Jacob Zuma by Ramaphosa.
A stronger rand versus the dollar increases costs for South African-based operations, although it is offset by higher commodity prices.
Anglo American said it does not hedge the currency, but protects itself through its diverse portfolio and efforts to cut costs.
(Additional reporting by Arathy S Nair and Noor Zainab Hussain in Bengaluru; Editing by Adrian Croft/Keith Weir)