Japan Nonferrous Smelters Gain from Higher Metals Prices

Japanese major 8 nonferrous smelters enjoyed total 100 billion yen of higher recurring profit only from higher copper and metals prices for the half year to September from same period of 2005, according to their financial results announced by Wednesday. That represented around 30% of 350 billion yen of their total recurring profit. They also gained from equity method profit from offshore mines and operations. The resource units will increase their profit for the full year when the metals prices are higher than their expectation. Sumitomo Metal Mining got the largest benefit from higher metals prices. The consolidated recurring profit increased to 2.5 times at 95.243 billion yen for the half year from same period of 2005, which included 46.2 billion yen of gain from higher prices. The net gain from higher price excluding gain from inventory valuation and favorable foreign exchange rate was 34.3 billion yen, which included 23.4 billion yen of gain from copper price, 3.2 billion yen from nickel price and 7.5 billion yen from gold and zinc. Equity method profit from offshore mines including Cerro Verde and La Candelaria also increased the profit. Nippon Mining Holdings increased the recurring profit by 86% to 70.5 billion yen with 87% higher sales at 503.6 billion yen for the first half from same period of 2005. The resources and metals unit enjoyed 9.6 billion yen of gain from higher copper price including profit for subsidiary. The equity method profit from offshore mines including Los Pelambres mine increased by 16.1 billion yen. Mitsubishi Materials increased the recurring profit by 60% to 58.7 billion yen for the first half from same period of 2005. The firm reported gain from higher metals price was 9 billion yen. The equity method profit from Los Pelambres mine and other operations was 2 billion yen. The higher metals prices including favorable ore purchase conditions brought 6 billion yen for Mitsui Mining & Smelting, 3-4 billion yen for Dowa Holdings, 1.8 billion yen for Furukawa and 4-5 billion yen for Toho Zinc for the half year.