Itochu Corp to Expand Energy, Natural Resource Investment

Itochu Corporation’s energy, metals & minerals company increases the investment to 460 billion yen for fiscal 2011 ending March 2012. The company adds 60 billion yen on original plan. However, the company is now cautious for new investment under adjusting resource market. The company expands existing assets including iron ore and coal mines while the company adds new upper stream assets for nonferrous metals.

The company president Ichiro Nakamura said resource market already turned into adjustment phase and the company selects new investment items severely in volume, production cost and capital expenditure for fiscal 2012. The company tries to secure profit even under lower resource price by expanding equity resource through expansion and development of existing projects.

The company doubles the equity iron ore and coal by 2015 through expansion of Australian and Brazilian iron ore mines and Australian, Indonesian and Colombian coal mines. Mr. Nakamura said the company tries to add copper and other base metals mining assets.

The company’s investment is record high and much higher than 100 billion yen in fiscal 2010. The company succeeded to get major investment opportunities including 126.5 billion yen Colombian coal asset and 78 billion yen US oil asset. The company still eyes 30 billion yen of new investment in nonferrous metals and rare metals by March 2012.

The company expects the net profit reaches record 154 billion yen in fiscal 2011, which is 41% higher than fiscal 2010 level. The company is separated into only metal business unit in fiscal 2012. The company seeks profit growth through wider equity resource base while the resource market could continue adjustment.