Mitsubishi Aims Mid-Term Supply Expansion of Iron Ore and Coal

Mitsubishi Corporation’s steel raw material department plans to increase the supply of iron ore and coal to meet mid-term demand expansion for steels. The department temporarily reduces capital expenditure in fiscal 2009 (Apr09-Mar10) but continues feasibility surveys for development of iron ore or nickel mines. The department aims to increase its iron ore equity to 40-50 million tonnes per year of output in future from current 7 million tonnes.

The department invested over 100 billion yen in fiscal 2008. Mitsubishi acquired 30% interests in Weda Bay nickel mine of Indonesia at US$ 145 million, the whole equity in New Saraji Coal Mine project from New Hope of Australia at AUD 2.45 billion, and interests in Kintyre Uranium project with Cameco of Canada from Rio Tinto at US$ 495 million.

The department entered into a contract for monopoly development of rail and port in iron ore development joint business with West Australian government in March, and will advance the feasibility study of the joint business in fiscal 2009 and develops if the demand recovery.

The department forecasts marine trade volume grows by 1.5 times for iron ore and by 1.3 times for coal after 2015. Mitsubishi will expand its coal output equity to 25 million tonnes per year and iron ore output equity to 20 million tonnes per year toward 2015 by expansion of existing mines in Canada and Chili and new development in West Australia. The department will acquire interests of iron ore at 40-50 million tonnes per year until 2020 by new business in Canada or Guinea.