Segment Information

Last Update : May, 2018

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.

Outline of performance for FY2017

  • While the Cerro Verde copper mine (Peru) recorded the paying out of royalties for the past fiscal year, reductions in equity method investment losses pertaining to the Sierra Gorda copper mine, the increase in copper prices, and other such factors resulted in a large year-on-year turnaround in segment profits.
  • The Hishikari Mine (Kagoshima Prefecture, Japan) and the Pogo gold mine (USA) maintained production levels on par with the previous year as planned.
  • Regarding overseas copper mines, the acquisition of additional interest in the Morenci copper mine contributed greatly to business results in comparison with the previous year.

Projections

  • For copper, SMM will continue to work on process improvement, stabilization, and cost reduction for the swift achievement of cash-neutral operation at the Sierra Gorda copper mine.
  • For gold, SMM will proceed a feasibility study for the Côté Gold Project.
  • Regarding new interest, SMM will concentrate on conducting its own explorations focusing on gold and will undertake proactive assessment of promising projects.

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.

Outline of performance for FY2017

  • In addition to the increase in the price of non-ferrous metals, factors including a weak yen in terms of foreign exchange resulted in segment profits exceeding the previous year.
  • Production and sales of electrolytic copper, electrolytic nickel, and ferronickel were lower than the previous year.
  • Production of nickel intermediate material at Coral Bay Nickel Corporation (Philippines) and Taganito HPAL Nickel Corporation was on a par with the previous year.

Projections

  • Copper smelting and refining will continue with an annual production of 450,000 tonnes.
  • Nickel smelting and refining will operate at full capacity including the production of nickel intermediate material at Taganito HPAL Nickel Corporation, which has now completed expansion work, and nickel sulfate at the Harima Refinery.
  • Preparations will be made for the start of commercial production of scandium in 2018.

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.

Outline of performance for FY2017

  • Production and sales of battery materials for automobiles both greatly exceeded the previous year due to investment in increasing production.
  • Crystal materials for communication devices such as smartphones were impacted by an inventory adjustment, meaning both production and sales were much lower than the previous year.
  • Demand for powder materials increased due to an increase in the number of electronic components for automobiles and the impact of a booming market, which resulted in continued robust sales.
  • Business transfer of lead frame operations from which SMM is to withdraw is almost complete.

Projections

  • For battery materials, work on a monthly production capacity of 3,550 tonnes of lithium nickel oxide will be completed, and production and sales are forecast to grow. Work will also proceed on the building of a monthly production capacity of 4,550 tonnes.
  • For crystal materials, SMM will enhance its cost competitiveness ahead of a recovery in demand.

Note

Consolidated sales figures are the total external sales with inter-segment transactions removed.
Total sales and profit for each segment include inter-segment transactions.

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