Sojitz to Expand Coal, Metals Equity

Sojitz Corporation’s Mineral Resources Unit tries to expand captive resources, mainly for coal and rare metals though 60% higher investment in fiscal 2009 started April from fiscal 2008. The firm expects the demand will grow in mid- and long-term despite of current slump in volume and price. The unit tries to secure more than 20 billion yen of recurring profit in 2-3 years even with severe business condition through the wider assets while the unit expects the profit decreases to 11 billion yen level in fiscal 2009 due to lower sales and price for commodities.

The unit expands the investment to 18 billion yen in fiscal 2009 from 11 billion yen in fiscal 2008. The unit invests 10 billion yen for coal assets including expansion of existing assets and new thermal coal interests. The unit also invests 4 billion yen for nonferrous metals including expansion of alumina project in Australia and new copper interest. The unit also seeks opportunities to get new manganese and metallic silicon resources.

The unit keeps investing in coal assets to secure annual 10 million tonnes of coal equity in 5 years while the unit expects the coal equity will increase to 7.5 million tonnes in fiscal 2011, which is near 40% higher than fiscal 2008. The unit expands the molybdenum equity to more than 4 million pounds in fiscal 2011, which is near 80% higher than fiscal 2008, by restarting suspended expansion of Canadian joint venture as early as in second half of fiscal 2009.

The unit also expands the supply ability of existing operations including Philippine nickel venture, which started second phase operation in earlier 2009, expansion of Australian alumina venture and Portuguese tungsten operation to improve the profitability.

The unit posted 22.8 billion yen of recurring profit for fiscal 2008, which was 30% higher than fiscal 2007, due to higher coal price and firm demand and higher price for metals. The unit expects the commodity price could keep lower than the high in 2008 while the plunged prices show sign to hit bottom recently. The unit tries to establish more profitable business structure even with the lower commodity prices.