Mitsui & Co., Ltd. ("Mitsui") announced today that it approved additional investment in the new mining area ("Project" or otherwise known as Kestrel Mine Extension) owned by Kestrel Joint Venture (Kestrel J/V: Rio Tinto 80%, Mitsui 20%) in Queensland, Australia, due to a recent increase in the development cost.
The additional capital expenditure for the Project, which is due to delays in the drift construction and increase in labor and mining equipment cost in Australia, will be a maximum of A$631 million (approximately 48.0 billion yen). Mitsui will invest A$126 million (approximately 9.6 billion yen) additionally through its 100% subsidiary Mitsui Coal Holdings in accordance with its proportion of the interest in the Project. Including this additional capital expenditure, the total capital expenditure for the Project will be a maximum of A$2,074 million (approximately 157.6 billion yen), whilst Mitsui's total capital expenditure will be A$415 million (approximately 31.5 billion yen).
Construction of the Project started in 2008, and the operation is expected to commence in 2013. The Project is estimated to produce a maximum of 6.5 million tons per annum (Mtpa) of coal.
Kestrel J/V commenced operation in 1992 and, at present, produces approximately 4 Mtpa of metallurgical and thermal coal for the export market in a mining area where reserves are expected to be exhausted in 2014. The Project will extend the operation period of Kestrel J/V by approximately 20 years.
Mitsui has positioned coal business as one of its core mineral resources and energy activities. Mitsui also aims to expand its equity coal and contribute to stable coal supply to meet rising global demand.
This announcement contains forward-looking statements. These forward-looking statements are based on Mitsui's current assumptions, expectations and beliefs in light of the information currently available to it and involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors may cause Mitsui's actual results, financial position or cash flows to be materially different from any future results, financial position or cash flows expressed or implied by these forward-looking statements. These risks, uncertainties and other factors referred to above include, but are not limited to, those contained in Mitsui's latest Annual Securities Report and Quarterly Securities Report, and Mitsui undertakes no obligation to publicly update or revise any forward-looking statements.
This announcement is published in order to publicly announce specific facts stated above, and does not constitute a solicitation of investments or any similar act inside or outside of Japan, regarding the shares, bonds or other securities issued by us.