Marubeni Targets 5-10 Million Tonnes Iron Ore Equity in 3-5 Years

Marubeni Corporation’s metals & mineral resources division expands interest in steel raw materials and nonferrous metals through aggressive investment with 200-300 billion yen in 3-5 years. The unit targets annual 5-10 million tonnes of iron ore equity during the period while the unit tries to secure 10 million tonnes of coking and thermal coal equity. The unit improves the profitability through new metal resources including rare metals along with synergy for trading. The unit targets 40-60 billion yen of consolidated net profit in 3-5 years, which is 2-3 times of current level.

The unit restarts new resource investment and expects the investment is 20-30 billion yen in second half of fiscal 2009 ending March 2010 while the unit holds investment activity under the company’s policy to improve balance sheet. The unit tries to find investment opportunity in copper, coal, aluminium, iron ore, ferroalloy and rare metals.

The firm tries to secure iron ore equity by fiscal 2010 while the unit has no iron ore equity despite of the years of research activity. The unit targets 5-10 million tonnes of iron ore equity in 3-5 years to improve the resource portfolio for growing steel industry mainly in developing countries.

The interest holding Lake Vermont coking coal mine in Australia, which started shipment in February, contributes to the profit. The unit studies potential expansion of Lake Vermont and another interest holding coal mine of Jellinbah East in Australia from annual 4 million tonnes of production to 6 million tonnes depending on availability of rail and port infrastructure. The unit targets 10 million tonnes of equity coal in 2013 through additional investment in coal mining compared with 5.4 million tonnes of current equity coal.

The unit holed the profit target of 7 billion yen for fiscal 2009. However, the unit already posted 5.1 billion yen of profit for the first half. The unit expects the profit could be higher in the second half than the first half if the current commodity price would continue. The unit tries to seek higher profit level through aggressive investment in steel raw materials and nonferrous metals.