Marubeni to Expend 300-360 Billion Yen for Resources in 3-Year

Marubeni’s energy, metals & mineral resources group invests 300-360 billion yen for new projects in 3 years to fiscal 2012 ending March 2013. The group tries to get new equity in copper, iron ore, coal, nickel and rare metals. The group also expands existing copper, coking coal and aluminium smelting projects. The group builds competitive resource assets for better profitability along with the effort for wider trading network and more specialized workforce.

The group invested only 18 billion yen in fiscal 2009, which is less than a tenth of fiscal 2008 level. The group held new investment except for additional investment in Chilean copper development when the company focused on better financial position. The managing executive officer Shinji Kawai said the group invests aggressively in resource and spends annual 100-120 billion yen in the new 3-year plan period.

The group tries to secure upper stream resource in energy including crude oil, natural gas and uranium while the group tries to acquire iron ore, thermal coal, nickel and rare metals to reinforce the resource portfolio. The group invests cash generation from Chilean copper mines, Australian coking coal mines and smelters in Canada and Australia for another development of new deposit and expansion of mines and smelters to secure additional supply ability.

The group targets 55 billion yen of consolidated net profit in fiscal 2010, which is 6% higher than profit in fiscal 2009. The profit will increase to 2.2 times at 31.5 billion yen for metals & mineral resources division while the energy related profit decreases due to onetime gain from royalty return. The metal related unit gains from higher price and sales volume for investing assets while Chilean Esperanza copper mine starts operation in October-December. The unit could post higher profit if the price level would increase more than the forecasted US$ 6,500 per tonne for copper and US$ 200 for coking coal.

The group posted 51.6 billion yen of net profit including steel products sales in fiscal 2009, which was 42% lower than fiscal 2008 level. The metal related unit posted 62% lower profit at 14 billion yen due to lower sales volume and price.