Sumitomo Metal Mining Rushes to Expand Mining Resources

There occurs acquiring war among world major nonferrous ore miners, for recent example, crossing takeover affairs of 4-5 trillion yen scale over Canadian nickel major, Falconbridge and Inco. Ichiro Abe, managing executive officer of Sumitomo Metal Mining, explained about the background of the acquisition, that is, mineral oligopoly by major nonferrous miners, and the mineral development strategy of Sumitomo Metal Mining.Mr. Abe pointed out world major nonferrous miners could gain stronger bargaining power of ore prices by acquisition and mineral oligopoly. The background was the development of hydrometallurgy technology by the major miners, he said. The development requires large capital investment and the larger scale company could become advantageous in the point of fund capacity.Japanese nonferrous ore refiners are already impacted by the oligopoly, for example, they are currently facing difficulty in copper ore price negotiation with BHP Billiton. However, Mr. Abe said, world major miners finally need to sell copper concentrate to pyrometallurgy method refineries under the present circumstances even though the miners strengthen their price control by oligopoly.The circumstances might change if the miners succeed in the development of hydrometallurgy method refineries of their own, Mr. Abe indicated. The miners need not to sell copper concentrate to external refineries but to hydrometallurgy refineries of their own. Under the situation, Japanese system to purchase and refine custom ore could not last without strong cost competitiveness.He explained Sumitomo Metal Mining aimed to start production at Cerro Verde copper mine in Peru within 2006, while the firm already started production at Pogo gold mine in Alaska. He said the firm started the research for laterite nickel around Solomon Islands in June with 100% investment by the firm. Sumitomo Metal Mining expected to finish the research in 3-4 years and to find a large laterite nickel deposit, Mr. Abe said.