Itochu Corp Plans 100-150B Yen Capex for Mineral Resources in F2010

Itochu Corporation’s Energy, Metals, & Minerals Company plans to invest 100-150 billion yen at maximum to increase interests for iron ore and coal mines in fiscal 2010 ending in March 2011. The basic plan is 100 billion yen, increasing by 1.6 times from fiscal 2009, 60 billion yen for expansion of conventional iron ore and coal mines in Australia and Brazil while 40-90 billion yen for new investment for steel resources, base metals, natural gas and uranium.

The Company’s total capex was 60 billion yen in fiscal 2009, 50 billion yen for conventional businesses and 9 billion yen for new investment. The firm invested 2.2 billion yen for iron ore mines of Itochu Minerals & Energy of Australia (IMEA) in Australia and 10 billion yen for IMEA’s coal mines while 3 billion yen for bio ethanol business and 4 billion yen for crude oil business in Azerbaijan. New investment was for a uranium interest in Namibia.

In fiscal 2010, the Company embarks 30 billion yen to expand IMEA’s iron ore mines and 15 billion yen for IMEA’s coal mines. The firm plans to invest 3 billion yen for exploration of crude oil, natural gas, base metals or platinum. At the same time, the Company eyes 40-90 billion yen capex to acquire new equities in mineral and resource businesses.

Itochu Corp aims to increase the interests of iron ore to 30 million tonnes until fiscal 2015 from 14 million tonnes in fiscal 2009 as well as coal interests to 15 million tonnes from 8 million tonnes. At the same time, the firm seeks new energy resources such as bio ethanol or biomass.

The firm estimates consolidated net profit of Energy, Metals, & Minerals Company at 115 billion yen for fiscal 2010, which increases by 75% from 2009 and marks the record high. The firm expects the profit of metal business expands by 2.2 times to 95 billion yen in fiscal 2010 from 2009 while the profit of energy business decreases by 12.3% to 20 billion yen. The metal business’ profit would improve by sales increase of iron ore and coal, rising selling price and profit improvement in the subsidiary, Marubeni-Itochu Steel.

Sales volume is planned at 14 million tonnes for iron ore in fiscal 2010, increasing from 12.1 million tonnes in fiscal 2009. Coal sales would increase to 8 million tonnes, as much as in fiscal 2009. IMEA’s profit is estimated to increase to 79.4 billion yen in fiscal 2010 from 34.1 billion yen in fiscal 2009 and Marubeni-Itochu steel’s profit would increase to 6 billion yen from 2.7 billion yen.