Sumitomo Corp. expects to turn a profit from its stakes in the Ambatovy nickel-cobalt mine in Madagascar and the Sierra Gorda copper mine in Chile within three years, Reuters reported May 23, citing President and CEO Masayuki Hyodo.
Sierra Gorda is seen turning a profit for the Japanese trading house as early as 2019. Sumitomo said earlier in May that losses from the Chilean copper mine are expected to widen 38% to ¥1.1 billion for the 12 months ending March 31, 2019, while Ambatovy's losses are seen narrowing 30% to ¥9.8 billion.
Amid delays due to technical problems and bad weather, Sumitomo has booked total impairments of ¥77 billion on Ambatovy and ¥47.6 billion on Sierra Gorda over the past few years, according to Reuters.
The company, which has a 47.67% interest in Ambatovy and a 13.5% interest in Sierra Gorda, is planning to invest ¥190 billion in its natural resources and chemical segment over the next three years.
"We will selectively invest in the metals and energy which will attract higher demand as global population grows," Hyoda said, noting that copper, nickel and cobalt, as well as oil and natural gas assets, would be on the company's radar for possible takeovers.
The executive added that the company will not build any more pure coal-fired power plants in Japan or in any other developed countries.
As of May 23, US$1 was equivalent to ¥110.03.
