Sojitz to sell Canadian copper mine stake, posts record 9-month profit
TOKYO (Reuters) - Japanese trading house Sojitz Corp, which on Thursday reported record profit for the nine months to end-December, said it was selling its 12.5% stake in Canada's Gibraltar Mines.
Sojitz said it booked a pre-tax loss of 6.3 billion yen ($49 million) in the October-December quarter from the planned sale of the copper mine to local partner Taseko Mines Ltd.
"The reasons for the withdrawal are unstable operations, declining grade and increased risk of environmental liabilities," Yoshiki Manabe, managing executive officer, told a news conference.
Manabe said the deal will likely close by the end of March.
Other Japanese partners, Furukawa Co and DOWA Holdings, which each own a 6.25% stake in the Canadian mine, separately said they had made no decisions on the future of their stakes.
Sojitz said net profit for the nine months ended Dec. 31 surged 75% to a record 108.7 billion yen and it maintained its net profit forecast of 110 billion yen for the year to March 31.
The company said profit had been driven by soaring coal prices, but it expects thermal coal prices to gradually fall toward the end of March as concerns over supply disruptions from the floods in Australia are receding and consumers look for coal sources other than Australia given the wide price spread between Australian and European coal.
Prices of high-grade Newcastle thermal coal futures in Australia surged to all-time highs of above $400 per tonne last year, but they have eased by nearly 40% so far this year to $247 per tonne as of Wednesday.
Still, the weaker market will have limited impact on its full-year earnings as most of the coal deals for the current quarter have already been settled, Manabe said.
Top importer China's resumption of Australian coal imports will likely have little impact, he added, as China is buying cheaper coal from Indonesia, Russia and Mongolia.
($1 = 128.9400 yen)
(Reporting by Yuka Obayashi; Editing by Sharon Singleton)