Sumitomo Corp Restarts Investment to Develop New Mines

Sumitomo Corporation’s second resource department plans to develop new supply sources of iron ore, coking coal and fuel coal. The department aims to acquire new equities in iron ore and coal mines while increases the output of manganese ore and iron ore at Assmang of South Africa. Demand for steel resources shows strong growth in emerging countries such as China and India. Sumitomo Corp plans to continue investment for favorable assets and expand its equities in iron ore and coal mines to each 10 million tonnes per year until 2015.

Assmang completed the expansion project to increase iron ore output to 10 million tonnes per annum from 8.4 million tonnes, in which Sumitomo Corp holds 13% equity. Assmang is scheduled to increase the annual capacity to 14 million tonnes in 2013 with a possibility of even earlier expansion. Sumitomo Corp also completed the expansion of manganese ore output to 5 million tonnes per annum from 3 million tonnes.

As to coal, Sumitomo Corp continues feasibility study on Australian largest fuel coal mine, whose output is expected at 25 million tonnes per year. The firm forecasts strong demand growth in China and Southeast Asia. The department also eyes Elga, Russian coal mine, as dominant source of coal with Sojitz, Japanese major business house, and Japanese coal users.

The department didn’t implement any new investment in the first half of fiscal 2009 (April-September). Mr. Toru Furuhata, the department’s general manager, said the department examines several investment plans for iron ore and coal.

The department’s financial result for April-September 2009 was higher than a year earlier because the department consolidated Assmang and the output of Oaky Creek mine in Australia increased. The department targets consolidated net profit at over 10 billion yen for October 2009-March 2010 despite of low profit from Assmang or higher yen exchange rate.