Segment Information

Last Update : June, 2019

Mineral Resources Segment

Sumitomo has been involved in the mineral resources business ever since the discovery of the Besshi Copper Mine in 1690. The technologies cultivated through the years at Besshi have subsequently been carried on at the Hishikari Gold Mine, which opened in 1983. Today Hishikari ranks among the world’s foremost sources of gold – a precious commodity the mine continues to produce in significant quantities.
In addition to its mineral resource operations in Japan, Sumitomo Metal Mining has for many years engaged in the development of mines overseas. Today the company is actively undertaking exploration at its own mines and participating in the development of jointly owned mines at points all around the globe.
Going forward, the company will continue striving for stable operation of its gold mines at Hishikari and Pogo, in Alaska, and will vigorously carry forward with further development of gold, copper and nickel resources.

Overview of performance in FY2018

  • Although we posted a profit on the sale of the Pogo gold mine, segment income decreased from the previous fiscal year. This was due to reasons including decreased production resulting from a decline in the grade of copper in ore at overseas copper mines.
  • Production at the Hishikari mine remained steady at a level on par with the previous year, as planned.
  • Royalties levied on mining companies for prior years at Sociedad Minera Cerro Verde S.A.A., which had been posted in the previous fiscal year, were recorded in this fiscal year too.

Future outlook

  • In copper, we will investigate Phase 2 development plans at the Quebrada Blanca copper mine and will proceed as planned with debottlenecking at the Sierra Gorda copper mine, while maintaining stable operations at other overseas copper mines.
  • In gold, we will continue stable operations at the Hishikari mine while proactively engaging in exploration to extend its mine life. At the Côté Gold Project, we will make every effort to begin production in 2021.

Smelting & Refining Segment

Equipped with the world’s highest level of technologies, Sumitomo Metal Mining produces and markets metal materials of outstanding grade. In Japan the company has two bases, both in Ehime Prefecture: the Toyo Smelter & Refinery producing copper and the Niihama Nickel Refinery producing nickel. Overseas bases include Coral Bay Nickel Corporation and Taganito HPAL Nickel Corporation, both in the Philippines.
Because smelting and refining operations have an impact on the environment, today the company is developing technologies targeted at further reducing CO₂ and other harmful emissions.

Overview of performance in FY2018

  • In copper smelting and refining, we achieved record production volume of 454,000 tonnes, with sales volume also increasing from the previous year.
  • In nickel smelting and refining, production and sales volume of electrolytic nickel and segment income declined from the previous fiscal year, due to reduced production caused by facilities troubles at Taganito HPAL Nickel Corporation.
  • In January of this year, we began commercial production of scandium oxide as by-product recovery from nickel smelting and refining.

Future outlook

  • In copper smelting and refining, we have scheduled regular plant repair from late October, and plan production of 420,000 tonnes.
  • In nickel smelting and refining, we will implement measures to improve the capacity utilization ratio at Taganito HPAL Nickel Corporation, and will move forward under a full production structure.
  • As by-product recovery, we will move forward with the construction of the chromite recovery process.

Materials Segment

Metals of all kinds, in the form of semiconductor materials and functional materials, are widely used for various purposes: copper for electrical circuitry, nickel powder for capacitors, and indium for liquid-crystal displays, to name a few. Sumitomo Metal Mining has been involved in the materials business since 1960. Today, applying technologies developed through the years, the company is processing metals into ever more advanced products meeting the latest needs of its customers.

Overview of performance in FY2018

  • In sales of battery materials, we achieved record high shipment volumes against a background of robust demand.
  • Although customer inventory adjustments continued for crystal materials, segment income increased from the previous fiscal year, due mainly to the absence in fiscal 2018 of the recording of the impairment loss on property, plant and equipment, which was recorded in the previous fiscal year.

Future outlook

  • In battery materials, we will maintain full production in order to meet ongoing robust demand against the background of the electrification of automobiles.
  • Despite concerns over slowing growth in the smartphone market, we plan sales of powder materials and crystal materials at the level of the previous fiscal year.

Note

Inter-segment transactions take place, and the figures released by SMM for sales are total external sales with inter-segment transaction removed. Sales for each business and segment profits show the amount prior to removal of inter-segment transaction. Segment profit structure ratio shows the ratio for the three-segment total.

From this year a voluntarily switch has been made from the Japanese standards used thus far to IFRS. As such, the accounting values for the year of comparison FY2017 have also been converted to IFRS.

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