Mitsui & Co. to Keep Investing in Mineral, Energy Resources in F2011

Mitsui & Co. intends to invest for mineral resources and energy area aggressively in fiscal 2011 starting April 2011 eyeing higher investment budget than original plan. The mineral & metal resources business unit targets more than 160 billion yen of net profit topping target for fiscal 2010. The executive vice president Ken Abe said mineral resources and energy business is backbone for the company. The firm invests additionally in expansion of existing assets while the firm tries to acquire new interest in iron making raw materials and copper and nonferrous metals. The firm tries to expand the resource business for long term value by securing additional resource supply ability and by establishing supply network for ferrous scrap and other recycling resources when emerging countries need more resources for coming years.

The firm invested 120 billion yen for mineral resources and energy in the first half of fiscal 2010. The investment includes 13.4 billion yen for Caserones copper mine and 4.6 billion yen for capital increase in Erdos Electrical Power & Metallurgical along with expansion of iron ore and coal projects. The firm plans new resource investment in copper and nonferrous metals in the second half and the investment could be more than 240 billion yen of budget for mineral resources and energy in fiscal 2010 depending on the conditions.

The firm’s total investment reached 360 billion yen in the first half and could be more than planned 700 billion yen for the full year. The firm already announced 500 billion yen of investment budget for fiscal 2011. However, the investment could be more than that depending on the conditions when required money gets larger and larger recently to get resource interests.

The firm expects iron ore and coking coal demand keeps strong in fiscal 2011 when Chinese demand keeps firm and India and other emerging countries also increase the demand. The firm already announced 156 billion yen of net profit target for mineral & metal resources business unit in fiscal 2011. But the unit now tries to secure more profit depending on resource price level when the profitability expands on wider assets base while the unit revised the profit target upward to 154 billion yen for fiscal 2010.

The firm tries to improve the profitability other units than mineral resources and energy business when the profit from the resource is significant high weight for the total company. However, Mr. Abe said the firm decided to expand mineral resources and energy business more. The firm tries to increase the presence in recycling resources in growing Asian market by establishing supply network in China and Asia while the firm keeps expanding traditional captive resources.