Sojitz Targets Doubling Profit from Coal Business

Sojitz Corporation’s coal & non-ferrous metals unit targets around 30 billion yen of recurring profit for the coal business in mid-term, which is more than double of current level. The unit expands the equity coal by 40% to annual 10 million tonnes including coking coal and thermal coal while the unit improves the trading function to follow growing demand in emerging countries. The unit improves the profitability widely based both on investment and trading including aluminium and copper business toward new mid-term plan starting April 2012.

The unit invested 25 billion yen in fiscal 2010 ended March 2011, which is 10 billion yen higher than fiscal 2009 level. The firm realized strategic investment including around 17 billion yen of majority acquisition of Minerva coal project. The unit plans same level investment in fiscal 2011 as fiscal 2010 focusing on expansion of existing projects. The unit senior general manager Hiroshi Matsumura said the unit tries to get investment opportunity for new competitive coal and other assets while the unit tries to avoid overvalued asset purchase.

Mr. Matsumura said the unit seeks variety for coal business. The unit tries to improve trading functions including the service for the buyers at Australian coal shipping port facilities based on long term business base including Australian coal assets and Russian coal trading. The unit expands coal trading from 17 million tonnes in fiscal 2010 to 20 million tonnes in fiscal 2011 by increasing trading for other than Japanese buyers from current annual 5-6 million tonnes.

The unit expands equity coal assets from current 7 million tonnes per year to 10 million tonnes in 2015 by expanding existing projects including ongoing double expansion of Lake Vermont mine. The unit increases the recurring profit from coal business from planned more than 12 billion yen in fiscal 2011 to 25-30 billion yen in mid-term period.

The unit posted more than 12 billion yen of recurring profit for fiscal 2010, which was 1.5 times of fiscal 2009 level thanks to more equity coal from majority acquiring Minerva mine and launched Moolarben mine and Gibraltar copper mine interest acquired in fiscal 2009. The unit expects the profit exceeds 13 billion yen for fiscal 2011.