Sumitomo Corporation’s mineral resources, energy, chemical & electronics unit will increase upstream resource assets by 300 billion yen to around 1 trillion yen in 2-3 years, said the unit general manager Kuniharu Nakamura said on Thursday. The unit adds competitive assets in the strategic items including copper, coal, iron ore and oil & gas. The unit tries to seek profit growth after the unit renews record profit in fiscal 2011 ending March 2012 by making balanced upstream resource portfolio in items, life and development timing and areas.
Mr. Nakamura said at press briefing in Tokyo office the unit’s upstream represented 60% of total unit assets in fiscal 2010 after the unit shifts the assets to upstream resources from only 40% upstream assets balance in fiscal 2008. He said the unit tries to increase upstream assets to 70% in around 2015 by adding competitive new assets while the unit keeps the mid- and downstream assets. The unit expects 97 billion yen of net profit for fiscal 2011 under higher market price of resources. Mr. Nakamura said the unit now can secure 60-80 billion yen of annual profit by expanding the earnings power through new investments. He said the unit sets profit target each year depending on the resource market under adjusting resources price while the unit expected continuous profit growth in and after fiscal 2012. Assistant general manager of the unit Toru Furihata, who is in charge of mineral resource division No.2, the division tries to expand the iron making raw materials and other business though Australian coal development and South African and Brazilian iron ore development. The firm increases iron ore business when the iron ore joint venture with Usiminas of Brazil, MUSA increases the production to 12 million tonnes in 2013 and 29 million tonnes in 2015 from 6.3 million tonnes in 2011. He indicates further expansion in future. General manager Akira Takeuchi of mineral resources division No.1 said Chilean Sierra Gorda copper molybdenum mine project, in which Sumitomo Corp. and Sumitomo Metal Mining joined in 2011, starts prestripping in February to accelerate the development targeting commercial production in 2014. He emphasized the project, which has world top 10 class reserve and produces annual 220,000 tonnes of copper, will supply near 10% of Japanese copper import.