Sumitomo Corp Increases Investment for Resource Interests to 110B Yen in F2010

Sumitomo Corp’s Mineral Resources, Energy, Chemical & Electronics Business Unit increases investment to 110 billion tonnes in fiscal 2010 ending in March 2011 from 85 billion yen in fiscal 2009. The firm aims to complete nickel development project in Madagascar and expand rights for iron ore, coal, cupper and energy industry. The firm also enhances middle-downstream businesses such as transport and improves the earnings structure.

The firm invested for Ambatovy nickel project of Madagascar at 30 billion yen in fiscal 2010 in order to start operation within 2010 and bring into full operation at 60,000 tonnes per year in 2013. Sumitomo Corp can secure 17,000 tonnes of nickel based on the 27.5% equity in the project. At the same time, the firm aims to expand interests for iron ore, coking coal and fuel coal along the growth of global steel market.

Sumitomo Corp’s investment decreased by 15% in fiscal 2009 from previous fiscal year. The firm invested about 45 billion yen for the nickel project, about 34 billion yen for the interests in North Sea oil. The firm also increased the equity in Pogo gold mine of Alaska to 15% from previous 9%. On the other hand, the firm sold the interests of copper mine in Indonesia and reduced the interests to 18.19% from 26%.

The Business Unit’s consolidated net profit is estimated to decrease by 14.9% to 55 billion yen in fiscal 2010 from fiscal 2009. Profit of chemical product business would move into the black of 4 billion yen while profit of resources and energy businesses would reduce to 50-60 billion yen. Silver, zinc and lead production at Bolivia’s mine would decrease due to low ore grade while the firm reflects Assmang’s accounting to the Business Unit behind 9 months.