Sumitomo Corp. to Keep Investment for Metals, Resources

Sumitomo Corporation’s mineral resources, energy, chemical & electronics business unit will continue to seek competitive resources based on 100 billion yen of investment plan for fiscal 2011 ending March 2012. The unit will improve the asset portfolio mainly for iron ore, coking coal, copper, oil and gas under the long term strategy despite of uncertain business condition. The unit tries to increase profitability in long term while the unit expects the profit hits record in fiscal 2011 due to higher price of resources.

The senior managing executive officer Kuniharu Nakamura said the unit will continue investment for resources while resources price have entered an adjustment phase. Mr. Nakamura sees the unit could acquire the resources at reasonable cost under higher yen rate and decrease in assets value while many asset holders try to liquidate holding assets under financial crisis.

The unit will invest around 100 billion yen for new assets under the 2 years plan through fiscal 2012. The unit now screens potential investment items mainly for the strategic items while the unit expended 9 billion yen for new copper mine in Chile in first half of fiscal 2011.

The unit continues pending expansion of iron ore mines in Brazil and South Africa while the unit seeks investment chance for new mines. The unit also expands existing coking coal mines in Australia and eyes additional investment in Australia while the unit tries to participate in major projects in Mongolia and Russia as long term task.

The firm expects the equity copper output decreases to slightly more than 50,000 tonnes in fiscal 2011 from 125,000 tonnes in peak due to lower output at Indonesian mine under expansion. The unit expects the output would increase to 100,000 tonnes in 2014 through expansion and new development. The unit tries to increase the output more by new development in Indonesia and investment in new mines.

The unit revised net profit target upward by 11 billion yen to 97 billion yen in fiscal 2011 from original target. The profit could reach 100 billion yen for the first time for the unit.