Sumitomo Corp. Expands Interest in Assmang of South Africa

Sumitomo Corporation announced on Thursday the firm purchased 20% share in Oresteel Investments Limited of South Africa, which is major shareholder of the major steel raw materials resource company, Assmang, for around 8 billion yen. The firm secures high quality iron ore, manganese ore and chrome ore through the participation. The firm tries to expand the profit through wider items and wider geological business in steel raw materials business under tight supply. Founding family, Sacco controls 60% of Oresteel with 20% share by Old Mutual, which is the largest insurance company in South Africa, and by Sumitomo Corp. each after Sumitomo Corp. bought 20% share from Old Mutual. Oresteel has 50% share in Assmang indirectly through listed holding company, Assore, in which Oresteel has 52.3% interest. Sumitomo Corp. has around 6% interest in Assmang including 1.8% share in Assore. Assmang, which produces annual 6 million tonnes of iron ore, plans to start production at Khumani iron ore mine in 2008 expanding the operation to 16 million tonnes in 2015. The new project, which is to expand existing rail way and port facilities, will become major lump ore source with cost competition.