Sojitz to Invest 55 Billion Yen for Metal, Energy in F2011

Sojitz’s energy and metal division plans maximum 55 billion yen of investment in fiscal 2011 started April. The cash cow division secures 70% of the firm’s investment budget while the division’s investment is lower than fiscal 2010 level with many big investment items. The division invests in new coal and oil & gas assets aggressively along with expansions for existing projects. The division tries to acquire competitive resources including exploration projects with long lead time when the division’s metal business focuses on iron ore, coal, copper and rare metals toward next mid-term plan.

The division plans 50-55 billion yen of investment compared with 70-80 billion yen of the firm’s investment budget for fiscal 2011. The division allocates the budget equally for energy and metals. The metal business targets to expand coking coal assets and to add thermal coal assets with growing demand in emerging countries while the division continues existing coal project expansion and completes expansion of Canadian molybdenum mine and Australian alumina refinery in the year.

The president of the division Shigeki Dantani said the division could liquidate some of existing assets to improve the assets portfolio. The investment could increase more depending on investment opportunity for promising projects including major coking coal development in Mongolia and Russia.

The division completed work for long term vision on metal business to focus the resources in strategic items. The division tries to launch Southdown iron ore mine in Australia as early as in 2014 to generate cash from the project in next mid-term plan from fiscal 2012 to 2014. The division tries to add coal assets while the equity coal will increase from current 7 million tonnes per year to 10 million tonnes in 2015 through expansion of existing projects. The division also eyes expansion of existing copper mine, new investment in copper and chrome assets to expand the resource oriented profit base.

The division invested 65 billion yen in fiscal 2010, which was 2.2 times of fiscal 2009 level and 10 billion yen higher than original plan. The division expanded the resource base as expected by acquiring niobium assets in Brazil, additional share in existing Australian coal project and Qatari oil project and expansion of existing Canadian molybdenum mine and Australian alumina refinery.