Message
from the President

Placing our relationship of social trust at the core of my management agenda, I pledge to fulfill SMM’s responsibility to create a sustainable society.

My pledge as your new president

It is an honor to address readers of this Sustainability Report as SMM’s new president, a position I was privileged to assume in June 2024. In accepting this weighty responsibility, I pledge to wholeheartedly embrace the “Sumitomo Business Spirit” passed down by my predecessors and to maintain the Company’s solid relationship of social trust as the core of my management agenda.
More than 35 years have passed since I joined SMM in 1987, and in retrospect the bulk of that time I was directly involved in production. A particularly memorable period is the two years, from 2006 to 2008, I worked at HPAL plant in the Philippines. After returning to Japan, I then served as General Manager of the Niihama Nickel Refinery. In both postings, I gained precious and valuable experience in hands-on operations. This long record of working where MONOZUKURI (manufacturing and operation) takes place now underpins my intent to focus on MONOZUKURI RYOKU (manufacturing and operational capability) as the primary source of the SMM Group’s competitive power.

Addressing material issues from both business and social perspectives

When the SMM Group set down its “Vision for 2030” as interim targets in the runup to achieving the Company’s Long-Term Vision, we identified eleven material issues of major importance in both business and broad social terms.
In the 2023 fiscal year, we scored significant progress in addressing a number of those issues. First, to offset climate change, we formulated and announced an interim target and roadmap for achieving carbon neutrality by 2050. Our new target is to cut the Company’s greenhouse gas (GHG) emissions in fiscal 2030 by 38% or more compared to the level of fiscal 2015. We aim to achieve this largely by developing technologies that will contribute to reducing GHG emissions. Central to this program will be pursuit of energy conversion: transitioning from heavy oil and coal to LNG and biofuels.
In conjunction with our commitment to make optimally effective use of non-ferrous metal resources, this past year we began construction of a recycling plant for lithium-ion secondary batteries, part of our quest to build a circular economy. The plant will incorporate a “battery to battery” approach: recovering non-ferrous metals from spent EV batteries and reusing the recovered metals in new batteries. In the resource procurement phase also, in fiscal 2023 we launched demonstration testing of Direct Lithium Extraction (DLE), a technology that enables faster lithium recovery with a light environmental load.
In other areas, as part of our ongoing efforts to prevent serious environmental accidents, we are striving for proper management of our tailings dams in line with the Global Industry Standard on Tailings Management (GISTM). In the context of promoting human rights throughout our supply chain, we are also focusing on maintaining responsible sourcing. Besides receiving third-party certification for the Company’s smelters and refineries, I aim to also further strengthen management throughout our supply chain.
Two other material issues to which I am personally strongly committed are “diverse human resources” and “development and participation of human resources.” Expanding and improving the human capital needed to sustain our MONOZUKURI RYOKU is absolutely essential in order for us to fulfill our corporate mission to maintain stable provision of non-ferrous metals. Under the managerial track employees system revised in fiscal 2023, going forward we will promote organizational vitalization through utilization of our internal recruitment system (“Career Up Challenge System”) and mid-career hiring. Through these and other steps, we will create a free and open corporate culture whereby diverse human resources can take a vibrant and active part.

Commitment to carrying on the Sumitomo Business Spirit and maintaining awareness toward acquiring social license

The Sumitomo Business Spirit incorporates two core ideas: jiri-rita, i.e. bring benefit to oneself and to others, and koushi-ichinyo, i.e. what benefits the public interest ultimately also benefits the individual. In essence, they express the belief that Sumitomo’s business operations must bring benefit not only to the Company itself but also to the Japanese nation and, even more broadly, to the world as a whole. What these ideas convey has much in common with the “sustainable management” sought throughout society today.
Today, embracing a stance calling for proactive contributions to solving social issues through our business operations is absolutely necessary for the SMM Group if we are to become “the world leader in the non-ferrous metals industry” as etched in our Long-Term Vision. One contribution can be made by helping to address climate change, an urgent issue affecting all mankind. In the years ahead, demand for the non-ferrous metals which the SMM Group produces – copper, nickel, cobalt, etc. – is projected to increase in conjunction with measures for fighting climate change: renewable energy-related facilities, EVs, etc. Today, as excellent mines become fewer in number and securing mineral resources becomes increasingly difficult, the SMM Group has a social obligation to maintain stable supplies of such resources as a way of contributing to the creation of a sustainable society.
At the same time, because the mineral resources industry necessitates large-scale development, impact on local communities is significant. As such, not only must we do everything conceivable to minimize negative environmental and social impacts during the development phase, before we proceed with a project we must also acquire a social license from the regions affected for what will eventuate after a development project has been terminated. From my experience having been involved in starting up a factory in the Philippines, I know the importance of engaging in dialogue with members of the local communities. The experience made me doubly aware that the SMM Group’s business is possible only when understanding and cooperation are received from the regions where mineral resources exist.
Ever since I joined the Company, from my occasional instructions in the Sumitomo Business Spirit and from what I have learned through the years at my worksites, I believe that “co-existence and co-prosperity” with local communities should be the core commitment of our business operations. Today, as dramatic changes take place in the social landscape and our business environment, carrying on “as usual” is not enough. Based on firm recognition of current changes, we must expand our focus to include the need to secure new social licenses that respond to society’s evolving demands. I pledge to do precisely this in the performance of my management duties going forward.

From my experience working in the Philippines, I came to feel deeply that what is most important in management is to build solid relationships of social trust throughout the performance of one’s business operations. For the SMM Group to grow on a sustained basis, it is indispensable that we win the trust not only of the local communities impacted by our operations but of a broad range of stakeholders. Based on this awareness, I pledge to fulfill our social responsibilities in the performance of my new position.
This Sustainability Report was published to engender broad understanding of the SMM Group’s initiatives being undertaken to advance sustainability management. We hope the Report will help deepen our dialogue with our stakeholders and promote working together in initiatives to create a sustainable world.

Nobuhiro Matsumoto
President and Representative Director