Marubeni Plans Aggressive Resource Assets Building

Marubeni Corporation’s energy, metals & mineral resources group tries to realize around 100 billion yen of investment in new projects in fiscal 2011 started April. The investment could be around 200 billion yen depending on the projects when the group tries to realize major investment in iron ore asset. The group tries to secure long term profitability by building competitive assets of iron ore, coal, copper and aluminium in metals and mineral resources area. The group expands the profit base with competitive upper stream assets and trading force while the group’s net profit would reach 100 billion yen for fiscal 2012.

The group’s investment was around 30 billion yen in cash out base in fiscal 2010 due to delay of some investment chances while the group planned 100-120 billion yen per year of new investment under 3-year plan through fiscal 2012. The managing executive officer Shinji Kawai said the group realizes investment projects on the table step by step to build competitive assets aggressively.

The group’s metals and mineral resources unit targets new investment in iron ore, coal and copper assets while the unit expands the aluminium business through expansion of existing projects. The unit expands the equity in coal and metals for better profitability through the new investment along with the expansions including Australian coking coal project and Chilean copper development for new deposit.

The group tries to diversify the assets in areas and timing by investing in new areas and in exploration projects with longer lead time while the firm’s major assets are only in Australia for coal and are major part in Chile for copper. The group tries to secure long term competitive assets for next generation by utilizing rich cash position when the resource demand will keep growing in emerging countries. The group also expands the trading base and human resource base for better profitability synergy with the resource assets.

The group expects the net profit increases by 34% to record 83 billion yen for fiscal 2011 from fiscal 2010. Under the higher commodity market than expected, the profit could be higher depending on the conditions including foreign exchange rate. Mr. Kawai is confident the profit should reach 100 billion yen in fiscal 2012 when production at Chilean Esperanza copper mine, which stared the operation in late 2010, reaches full capacity. The group tries to realize higher earning power in mid- and long-term through the aggressive investment.