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Gate 3 Medium-term Management Plan

Mineral & Metal Resources Segment

Iron ore business / Robe River iron mine (Australia)

Iron ore business / Robe River iron mine (Australia)

  • Mineral & Metal Resources Business Unit
Business Activities

We ensure a secure and stable supply of mineral and metal resources essential to society through our business investments and trading activities across the value chain. We also promote recycling business in anticipation of sustainability and the circular economy.

  • Yuki Kodera Managing Officer, Chief Operating Officer<br>of Mineral & Metal<br>Resources Business Unit

    Yuki Kodera Managing Officer,
    Chief Operating Officer
    of Mineral & Metal
    Resources Business Unit

Business Environment

  • The Chinese economy has continued to expand despite the uncertainties in the global economy including U.S.– China trade friction. As the presence of Europe, the U.S. and Japan declines, India and Southeast Asia have become more prominent.
  • The movement to reduce emissions of greenhouse gases has gained momentum as evidence of climate change becomes more apparent.
  • Amid growing needs to reduce environmental load, it is inevitable to reduce the use of fossil fuels, promote electric vehicles, and increase the ratio of renewable energy.

Progress under Previous Medium-term Management Plan (top) and Targets in Medium-term Management Plan 2023 (bottom)

  • Built a solid earnings base, improved invested asset value: iron ore, developed new ore deposits to replace existing deposits; coking coal, optimized asset portfolio; copper, improved invested asset value
  • Addressed changes in business environment, new business development: implemented new initiatives in recycling businesses and reduced emissions of greenhouse gases
  • In addition to reinforcing underground resource business, aim to balance economic viability and sustainability by combining with recycling business, with eyes on sustainability and the circular economy
  • Implement measures in response to changes in global environment (low-carbon society), and create businesses in the value chain by taking on challenges in new domains

Individual Strategies

Area Our Approach
Iron ore
  • We are developing new iron ore deposits at Robe River and BHP South Flank, to establish a solid earnings base in the iron ore mining business in Australia, and contributing to increase the value of Vale S.A.
Coal
  • We are improving the value of the Australia coal mining business and the Mozambique operations and contributing to optimize the portfolio.
Copper
  • We aim to maximize the value of existing assets in Chile and strengthening functions through the value chain.
Others
  • We are developing initiatives and establishing an earnings base for recycling business.
  • We are creating a value chain in secondary battery raw materials.
  • We are responding to changes in the industry structure toward a low-carbon society and promoting ESG initiatives.

Impact from COVID-19 and Response Policies

  • Impact on lower production and sales in mining operations, and lower trading volume due to weaker demand.
  • Along with operators in each business, we are taking thorough measures to prevent the spread of COVID-19 and minimizing its impact on operations.

Major Businesses

Iron ore

* Please view the table below while scrolling horizontally.

Name*1 Location FY Mar/2020
Equity Production
Main Partner Equity Ratio*5 Revenue Recognition
Robe River Australia 21.5 million tons Rio Tinto  33.00% Consolidated (partially accounted for by equity method)
Mt. Newman / Yandi / Goldsworthy / Jimblebar Australia 19.4 million tons BHP 7.00% Consolidated (partially accounted for by dividend)
Vale Brazil 16.9 million tons*3 Vale 5.58% Dividend
Coal

* Please view the table below while scrolling horizontally.

Name*1 Location FY Mar/2020
Equity Production
Main Partner Equity Ratio*5 Revenue Recognition
South Walker Creek / Poitrel Australia 2.0 million tons*3 BHP 20.00% Equity method
Kestrel Australia 1.4 million tons*3 EMR / Adaro 20.00% Consolidated
Moranbah North / Grosvenor*2/ Capcoal / awson Australia 6.9 million tons Anglo American Various Consolidated
Moatize / Nacala Mozambique 1.2 million tons*3 Vale Moatize:approx.15% Moatize: Dividend
Nacala:approx.50% Nacala: Equity method
Copper

* Please view the table below while scrolling horizontally.

Name*1 Location FY Mar/2020
Equity Production
Main Partner Equity Ratio*5 Revenue Recognition
Collahuasi Chile 62.4 thousand tons*3 Anglo American 11.03% Equity method
Glencore
Anglo American Sur Chile 37.0 thousand tons*3 Anglo American 9.50% Equity method
Codelco
Caserones Chile 33.0 thousand tons*3 JX Nippon Mining & Metals 22.63% Other
Mitsui Mining & Smelting
Nickel

* Please view the table below while scrolling horizontally.

Name*1 Location FY Mar/2020
Equity Production
Main Partner Equity Ratio*5 Revenue Recognition
Coral Bay Philippines 3.5 thousand tons*4 Sumitomo Metal Mining 18.00% Equity method
Taganito Philippines 4.7 thousand tons*4 Sumitomo Metal Mining 15.00% Dividend
  • Includes JV names, company names, and project names
  • To be acquired in the fiscal year ending March 31, 2021, and therefore does not include equity production (as of August 2020)
  • Jan.–Dec. 2019 results
  • Production capacity base
  • As of the end of March 2020

Cost Competitiveness of the Above Commodities

Iron ore

Iron ore Iron ore

Coal

Coal Coal

Copper

Copper Copper

Major Subsidiaries & Associated Companies

(Consolidated) Iron ore mining operations in Australia
Businesses Mining and shipment of Australian iron ore
Ownership
Interest (%)
Var.
Annual
Earnings
(¥ billion)
18/3   110.4
19/3   106.7
20/3   171.5
(Consolidated) Coal operations in Australia
Businesses (Consolidated) Coal operations in Australia
Ownership
Interest (%)
Var.
Annual
Earnings
(¥ billion)
18/3   46.3
19/3   48.5
20/3   27.4
(Consolidated) Coal and rail & port infrastructure business in Mozambique
Businesses Investment in coal and rail & port infrastructure business in Mozambique
Ownership
Interest (%)
100.0
Annual
Earnings
(¥ billion)
18/3   2.6
19/3   4.1
20/3   (20.6)
Oriente Copper Netherlands B.V.
Businesses Investment in the Chile-based copper company Inversiones Mineras Becrux SpA
Ownership
Interest (%)
100.0
Annual
Earnings
(¥ billion)
18/3   2.6
19/3   (2.7)
20/3   (5.7)
Mitsui Bussan Copper Investment & Co., Ltd.
Businesses Investment in the Caserones copper mine in Chile
Ownership
Interest (%)
100.0
Annual
Earnings
(¥ billion)
18/3   (22.6)
19/3   (2.3)
20/3   (0.9)
Japan Collahuasi Resources B.V.
Businesses Investment in the Collahuasi copper mine in Chile
Ownership
Interest (%)
91.9
Annual
Earnings
(¥ billion)
18/3   6.3
19/3   9.1
20/3   8.9
Inner Mongolia Erdos Electric Power & Metallurgical Co., Ltd.
Businesses Coal mining, power generation, ferrous alloy and chemical production and water pumping
Ownership
Interest (%)
20.2
Annual
Earnings
(¥ billion)
18/3   5.1
19/3   5.1
20/3   5.9