Mitsui & Co. to Expand Coal, Energy Assets Aggressivelys

Mitsui & Co.’s energy business unit I expands the equity coal assets significantly in 4, 5 years. The unit develops Australian coking coal resources and new sources in other areas while the unit also expands thermal coal supply capacity to contribute to Japanese buyers directly or indirectly. The unit tries to expand the assets and tries to keep the balance of coking coal 2 to thermal coal 1 as now. The unit tries to contribute to higher profitability to energy segment and whole company by expanding the value chain of energy including oil and gas from upper stream equity to distribution service.

The unit invested mainly for expansion and maintenance of existing projects in fiscal 2009 ended March 2010. The unit develops shale gas project in Pennsylvania acquired in fiscal 2009 while the unit eyes major investment for new coal assets.

The unit tries to develop coking coal resources in Australia aggressively as before while the unit eyes development in new areas when new coking coal development condition gets severer in Australia. The unit tries to get new coking coal assets in Mozambique, Mongol and Russia. The unit tries to develop holding undeveloped thermal coal deposits to contribute to stable supply when the demand increases for China, India and emerging countries.

Mitsui & Co.’s equity coal was 8.9 million tonnes in fiscal 2009 including 6.4 million tonnes of coking coal. The firm expects the equity coal increases by 35% to 12 million tonnes in fiscal 2012. The energy business unit I expects the equity coal could increase 20 million tonnes level in 2015.

The equity oil and gas increased by 32,000 barrel to 188,000 barrel per day in oil equivalent in fiscal 2009 from fiscal 2008. The equity reaches 244,000 barrel in fiscal 2012. The unit tries to seek competitive oil and gas assets while the gas equity weight increases slightly in the portfolio due to the newly acquired shale gas.

The energy segment posted 83.8 billion yen of net profit in fiscal 2009, which was 45.3% lower than fiscal 2008 due to lower price for oil and coal. The segment plans 100 billion yen of profit in fiscal 2010, which is 19.3% higher than fiscal 2009. The segment posted 32.6 billion yen profit in April-June.

The segment targets 110 billion yen of profit in fiscal 2011 while the profit is still lower than 153.3 billion yen in fiscal 2008. The profitability increases gradually along with the higher equity for oil, gas and coal. The energy business unit I tries to expand the competitive assets to secure more than 100 billion yen of annual profit for the segment even at low market price condition.