Marubeni to Accelerate Investment in Metals, Mineral Resources

Marubeni Corporation’s energy, metals and mineral resources group accelerates investment mainly for metals and resources. The managing executive officer Shinji Kawai said the firm tries to realize around 200 billion yen of investment in 6 months mainly for the strategic items of iron ore, coal, copper and aluminium. The firm sees investment conditions are favorable when commodity prices are adjusted and asset prices decreases along with historical high yen rate while the financing is tighter due to European crisis. The firm takes the chance to build competitive assets for better long term profitability.

The firm invested 75 billion yen for energy, metals and mineral resources in one and half year through September under maximum 360 billion yen of investment budget under the 3-year plan through fiscal 2012 ending March 2013. The investment would be peak in next 6 months. The main target is pending iron ore assets. The firm already decided to increase share in Canadian aluminium smelter while the firm tries to realize investment in studying copper and coal assets.

The group invested around 45 billion yen mainly for energy assets in the first half of fiscal 2011. The firm already decided to invest around 14 billion yen for additional share in Canadian aluminium smelter, around 23 billion yen for interest in oil & gas field and liquid natural gas asset in Papua New Guinea and around 30 billion yen for Canadian coking coal interest since October. The group’s investment exceeds 100 billion yen for fiscal 2011 and could increase more depending on additional investment opportunity.

The firm expects newly developed copper mine in Chile will reach full capacity operation by end of 2011. The firm made a foothold in Canadian coal business through the acquisition of coking coal mine while the firm expands existing coal projects in Australia. The firm expands aluminium interests through expansion at Canadian smelter. With iron ore asset, the firm can secure sustainable growth scenario for all 4 strategic items.

The firm posted 49.3 billion yen of net profit for natural resources business in the first half of fiscal 2011, which was 84% higher than same period of fiscal 2010 thanks to higher commodity prices. The profit increases by 43% to record 88.5 billion yen for fiscal 2011 from fiscal 2010 under high energy price despite of delay in Chilean new copper mine ramp up. With full capacity operation at the Chilean mine, the profit could reach 100 billion yen in fiscal 2012.