We continued to deliver on our strategy during the year in an uncertain economic environment. Our diversification into oil & gas enabled us to deliver strong financial results despite a difficult year for the mining industry and some Company specific challenges. Challenges for the industry persisted in 2012 as the market uncertainty and volatility witnessed since the global financial crisis continued. The recent trends of slower growth in China, a troubled euro zone and a gradual recovery in the US were the main factors which depressed the economic sentiments of the global economy. The global industry also faced falling prices combined with increasing costs creating further pressure on margins in the mining and metal industry. In addition to these factors, during the year our iron ore businesses in Goa and Karnataka were impacted by the mining restrictions which reduced our operating profit by US$485.3 million compared to the previous year. Against this backdrop, we improved our operational performance delivering production growth and reducing costs across all our segments. Following our acquisition of the controlling stake in Cairn India, it delivered excellent financial results in its first full year and helped us to create a world class diversified natural resource company.
Over the years we have built a diversified company with a well-balanced portfolio covering oil & gas, metals, bulks and power and are India's leading natural resource company. Most of our growth projects are now complete so we have passed the inflexion point where free cash flow exceeds our growth capital expenditure. We are now focused on deleveraging and reducing debt.
We continue to focus on delivering growth and long-term value for our stakeholders, by investing in, and maintaining, structurally low cost, high quality assets with long operational lives where we can drive further improvement through efficiencies. Structurally our Tier-1 asset portfolio provides us with a competitive cost position as the majority of our businesses are in the lowest quartile of the global cost curve.
Our success in extending our resource base is essential to sustain future growth. We are committed to sustainable development, reflecting the needs of all our stakeholders – our employees, our local communities, our environmental stakeholders – as well as our shareholders.