Nittetsu Mining Co., Ltd.

Business Details

The Ore Division of the Group's Resources Business is centered on the mining, processing, and sale of Limestone, Crushed Stone, Tankaru (Calcium Carbonate Powder), and related products. It operates at multiple domestic sites centered on the Torigatayama Mine (Kochi Prefecture), providing stable supply to the steel, chemical, and construction industries. It also conducts overseas exports to Taiwan, Australia, and Hong Kong utilizing shipping facilities facing the Pacific Ocean. In FY2026 (ending March 2026), sales to external customers were ¥66,907 million, representing approximately 31.9% of consolidated sales, making it a core segment.

Recent Overview

Achieved increased revenue and profit due to higher selling prices and increased revenue at subsidiaries

In the Ore Division for FY2026 (ending March 2026), rising selling prices of Limestone, the mainstay product, and increased revenue at certain consolidated subsidiaries led to sales of ¥66,907 million (up ¥3,541 million, or 5.6%, year-on-year) and segment profit of ¥8,007 million (up ¥752 million, or 10.4%, year-on-year), achieving both increased revenue and profit. Although Limestone sales volume declined slightly to 22,118 thousand tons, the rise in unit price offset the volume decrease. Impairment losses were limited to ¥201 million (significantly reduced from ¥1,912 million in the prior period), recorded at three sites: the Oita Plant, Nagaoyama Quarry, and Higashi-Kagoe Mining Office.

Key Products

Growth Drivers

• Rise in selling prices of mainstay products such as Limestone (price increases taking hold for the steel and chemical industries)
• Improved production efficiency through optimization of production and sales systems at the Torigatayama Mine
• Expansion of exports to overseas markets (Taiwan, Australia, Hong Kong, etc.) utilizing Pacific shipping facilities (overseas sales of ¥7,254 million)
• Contribution from increased revenue at certain consolidated subsidiaries
• Efforts to improve capital efficiency through the introduction of ROIC management (Third Medium-Term Management Plan)

Risks

• Risk of economic fluctuations in the steel and construction industries, the primary destinations for Limestone demand (impact of structural reforms and decarbonization by steel manufacturers)
• Risk of profit margin pressure due to rising mining costs (higher fuel and labor costs)
• Ongoing impairment risk at the Oita Plant, Nagaoyama Quarry, and Higashi-Kagoe Mining Office (impairment losses totaling ¥201 million recorded at these three sites in FY2026 (ending March 2026) as well)
• Gradual downward trend in Limestone sales volume (22,118 thousand tons in FY2026 (ending March 2026), down 290 thousand tons year-on-year)
• Foreign exchange fluctuation risk and transportation cost volatility risk associated with expanding overseas exports

Business Details

This segment's business foundation consists of domestic and overseas sales of Electrolytic Copper and Copper Concentrate, copper mining and sales at the Atacama Mine in Chile (Atacama Kozan Mine affiliated company), and copper smelting by the affiliated company Hibi Kyodo Smelting Co., Ltd. Sales of ¥120,289 million represent approximately 57.3% of the Group's total (¥209,717 million), making it the largest segment. The structure is strongly affected by copper prices and exchange rates, with high sensitivity to international commodity market conditions. Development of the Alcaparrosa Mine (Chile) has also progressed to its final stage.

Recent Overview

Segment profit increased 613.3% year-on-year due to increased revenue at Atacama, higher copper prices, and extended useful life

Segment profit for the Metals Division in FY2026 (ending March 2026) increased substantially to ¥6,744 million from ¥945 million in the prior period (up 613.3% year-on-year). This was driven by increased revenue at the Atacama Mine and a decrease in production costs, in addition to a rise in domestic selling prices for Electrolytic Copper. Furthermore, an extension of the useful life (a change in accounting estimate) due to an increase in recoverable ore reserves at the Atacama Kozan Mine affiliated company reduced depreciation expenses by ¥1,228 million, boosting profit. The Alcaparrosa Mine has progressed to its final stage, with operations expected to begin around this summer, but a contract amendment was made to increase the borrowing limit due to increased development costs (subsequent event).

Key Products

Growth Drivers

• Rise in international copper prices (from 425.00¢/lb in the prior period to 490.59¢/lb in the current period, with 550.00¢/lb forecast for the next period) improving mining and sales revenue
• Reduction of ¥1,228 million in depreciation expenses due to extension of useful life (change in accounting estimate) accompanying an increase in recoverable ore reserves at the Atacama Mine
• Improved profitability due to increased revenue at the Atacama Mine and reduced production costs, etc.
• Expected new revenue contribution from the start of operations at the Alcaparrosa Mine around this summer
• Expansion of overseas sales (Electrolytic Copper to India, China, and Taiwan at ¥26,044 million; Copper Concentrate to Chile at ¥21,267 million)
• Securing new resources through entry into the Oracle Ridge copper exploration project in Arizona, USA (subsequent event: making Wedgetail Operations LLC a subsidiary)

Risks

• Risk of fluctuations in international commodity prices for copper and gold, etc. (large direct impact on sales and profit)
• Foreign exchange fluctuation risk (impact of yen depreciation/appreciation on mining costs and sales revenue)
• Risk of delays and cost overruns in the development of the Alcaparrosa Mine (development costs have already increased relative to the original plan, being addressed by expanding the borrowing limit)
• Risk of production volume fluctuations at the Atacama Mine (revenue deterioration in the event of decreased sales)
• Overseas political and regulatory risks in Chile, etc. (affecting mining operations and maintenance of mining rights)
• Derivative valuation loss risk (¥857 million recorded on a consolidated basis in the current period)
• Risk of reassessment of recoverable ore reserves, which is the premise for the extension of useful life (change in accounting estimate)

Business Details

This segment consists of the Machinery Division, which handles procurement and sale of mining, construction, pollution control, chemical, and metal processing machinery, electrical equipment, and water treatment agents, and the Environment Division, centered on environmental countermeasure products such as dust collectors. It includes consolidated subsidiaries such as Kobukuro Techno Co., Ltd., Kaho Manufacturing Co., Ltd., and Nippon Ball Valve Co., Ltd. Expanding sales and overseas development of the mainstay environmental product Poly-Tetsu (Water Treatment Agent) form the core of the growth strategy. While the Machinery Division remained flat year-on-year, sales in the Environment Division progressed favorably.

Recent Overview

Increased revenue due to strong performance in the Environment Division, but profit rose only slightly due to soaring raw material costs

In FY2026 (ending March 2026), while the Machinery Division remained at the same level as the prior period, sales in the Environment Division progressed favorably, resulting in sales of ¥15,905 million (up 7.7% year-on-year), achieving increased revenue. However, segment profit rose only slightly to ¥2,081 million (up 0.7% year-on-year). This was because the impact of soaring raw material prices for Poly-Tetsu (water treatment agent), the mainstay product of the Environment Division, pressured profitability.

Key Products

Growth Drivers

• Strong domestic sales of the Environment Division (Poly-Tetsu, etc.) and acquisition of new customers
• Overseas development of Poly-Tetsu in Taiwan and Vietnam (business development by the Taiwan joint venture)
• Entry into the domestic bag filter market and export expansion using sinter lamella filters
• Expanding demand for dust collectors and pollution control equipment amid tightening environmental regulations
• Improved capital efficiency and expanded business fields through the introduction of ROIC management

Risks

• Profitability pressure due to soaring raw material prices for environmental products (Poly-Tetsu) (materialized in the current period)
• Risk that the Machinery Division's sales remain flat while growth momentum is concentrated in the Environment Division
• Local regulatory and partner risks in overseas expansion (Taiwan, Vietnam)
• Risk of declining profitability of environmental products due to intensifying price competition with competitors
• Risk of deteriorating profit margins due to further increases in raw material and procurement costs

Business Details

Nittetsu Mining's Real Estate Business handles the leasing of office buildings, condominiums, stores, factories, warehouses, etc., as well as real estate sales. Although its share of consolidated sales is small at 2.3% (FY2026, ending March 2026), it maintains a high-profitability structure that includes the sale of real estate for sale. In addition to stable cash generation based on rental income, the sale of real estate for sale is the main driver of performance fluctuations.

Recent Overview

Sales and operating profit both roughly doubled due to the sale of real estate for sale

In FY2026 (ending March 2026), the sale of real estate for sale was realized, resulting in a significant increase in both sales and profit, with sales of ¥4,746 million (up 65.1% year-on-year) and operating profit of ¥3,318 million (up 97.7% year-on-year). The operating profit margin improved significantly to 69.9% from 58.2% in the prior period. The sale of real estate for sale was a one-time factor, and continuity in the following periods should be noted.

Key Products

Growth Drivers

• The performance-boosting effect of realized sale opportunities for real estate for sale
• Securing continuous rental income through stable occupancy of leased properties
• Promotion of efficiency and optimization of owned assets accompanying the introduction of ROIC management
• Maintenance and improvement of profit margins through the suppression of repair costs

Risks

• Risk of performance fluctuations dependent on the timing of sales of real estate for sale
• Risk of declining rent levels and rising vacancy rates due to deterioration in the real estate market
• Risk of declining profit margins due to increased repair and maintenance costs
• Risk of impact on real estate valuations due to rising interest rates

Business Details

Nittetsu Mining's Renewable Energy Business consists of three businesses: the Geothermal Division (steam supply and sales), the Solar Power Generation Division (electricity supply and sales), and the Hydroelectric Power Generation Division. In FY2026 (ending March 2026), increased revenue in the Geothermal Division led to sales of ¥1,868 million (up 6.0% year-on-year) and operating profit of ¥645 million (up 35.3% year-on-year). The expansion of the geothermal business through the consolidation of Hakusuigoe Geothermal Co., Ltd. as a subsidiary and a decrease in repair costs contributed to improved profit margins.

Recent Overview

Operating profit improved substantially, up 35.3% year-on-year, due to increased revenue in the Geothermal Division and reduced repair costs

In FY2026 (ending March 2026), while the Solar Power Generation Division remained at the same level as the prior period, increased revenue in the Geothermal Division led the overall performance, with sales of ¥1,868 million (up ¥104 million year-on-year). Operating profit rose substantially to ¥645 million (up ¥168 million year-on-year) due to increased revenue in the Geothermal Division and a decrease in repair costs. Hakusuigoe Geothermal Co., Ltd. newly joined as a consolidated subsidiary, strengthening the geothermal business structure. Power generation volume increased substantially to 212 thousand MWh from 174 thousand MWh in the prior period.

Key Products

Growth Drivers

• Revenue increase effect in the Geothermal Division (expansion of steam sales)
• Expansion of the geothermal business through the consolidation of Hakusuigoe Geothermal Co., Ltd. as a subsidiary
• Improved profit margins due to reduced repair costs
• Expansion of renewable energy supply due to increased power generation volume (212 thousand MWh, up 22% year-on-year)
• Promotion of natural energy utilization toward achieving carbon neutrality by 2050

Risks

• Downward pressure on sales due to sluggish growth in the Solar Power Generation Division
• Risk of increased costs due to the implementation of periodic repair work in the Geothermal Division
• Risk of power generation volume fluctuations dependent on weather and natural conditions
• Risk of price revisions under the Feed-in Tariff (FIT) system for renewable energy
• Limited contribution to overall Group profitability due to the small segment scale (sales of ¥1,868 million)

Business Details

The Ore Division mines, processes, and sells Limestone, Crushed Stone, Tankaru, and other products from multiple domestic limestone mine sites, supplying the steel, cement, and chemical industries, among others. The Metals Division mines Copper Concentrate at the Atacama Mine in Chile, smelts and sells Electrolytic Copper, and directly sells Copper Concentrate. Total sales of the Resources Business in FY2026 (ending March 2026) were ¥187,197 million, representing 89.2% of consolidated sales, making it a core business.

Recent Overview

Metals Division profit rose 613% due to higher copper prices and lower costs; Ore Division also saw increased profit due to higher prices

Segment profit for the Metals Division in FY2026 (ending March 2026) increased by ¥5,799 million (613.3%) year-on-year to ¥6,744 million. The main factors were increased revenue at the Atacama Mine (copper price of 490.59¢/lb, up 65.59¢/lb year-on-year) and a decrease in production costs, etc. Additionally, an extension of the useful life due to an increase in recoverable ore reserves at the Atacama Kozan Mine affiliated company reduced depreciation expenses by ¥1,228 million, boosting profit. The Ore Division also achieved sales of ¥66,907 million (up 5.6% year-on-year) and segment profit of ¥8,007 million (up 10.4% year-on-year) due to rising Limestone selling prices and increased revenue at certain subsidiaries. The Alcaparrosa Mine (Chile) has experienced increased development costs and a delayed start to operations, but has progressed to its final stage, with operations expected to begin around this summer.

Key Products

Growth Drivers

• Continued rise in Limestone selling prices (price revisions centered on the Torigatayama Mine)
• Improved profitability at the Atacama Mine due to the rise in international copper prices (490.59¢/lb, up 65.59¢/lb year-on-year)
• Extension of useful life (decrease in depreciation expenses of ¥1,228 million) accompanying an increase in recoverable ore reserves at the Atacama Mine
• Future expansion of copper production due to the start of operations at the Alcaparrosa Mine (Chile) (expected around summer 2026)
• Sales expansion due to increased sales volume of Copper Concentrate (50,304t, up 234t year-on-year) and rising prices
• Expansion of the resource portfolio through entry into the Oracle Ridge copper exploration project in Arizona, USA (subsequent event: April 2026)

Risks

• Fluctuations in international copper prices and exchange rates (direct impact on Metals Division profitability; next period forecast assumes LME copper price of 550¢/lb and exchange rate of ¥155/USD)
• Risk of delays and cost overruns in the development of the Alcaparrosa Mine (development costs have already increased, with the borrowing limit amended upward)
• Operational risks at the Atacama Mine and Alcaparrosa Mine (geopolitical, weather, equipment troubles, etc.)
• Fluctuations in Limestone demand (dependent on capital investment trends in the steel and cement industries; Limestone sales volume down 290 thousand tons year-on-year)
• Regulatory, environmental, and social risks in the Republic of Chile (mining operation permits and community relations)
• Risk of continued impairment losses at the Oita Plant, Higashi-Kagoe Mining Office, and Nagaoyama Quarry (totaling ¥201 million in FY2026, ending March 2026)
• Increased financial burden due to a substantial increase in long-term borrowings for Alcaparrosa Mine development (long-term borrowings under fixed liabilities increased from ¥9,771 million to ¥44,719 million)

Business Details

This is an adjustment category that includes general and administrative expenses, R&D expenses, exploration costs, and other corporate expenses not attributable to the Nittetsu Mining Group's five reporting segments (Ore, Metals, Machinery & Environment, Real Estate, and Renewable Energy), as well as elimination amounts for inter-segment transactions, elimination amounts for unrealized gains/losses, and adjustments to the allowance for doubtful accounts. It is disclosed not as an independent business segment but as an adjustment item to reconcile with the consolidated financial statements.

Recent Overview

Corporate expenses decreased by ¥97 million year-on-year, narrowing the extent of the adjustment amount's downward pressure

The total adjustment amount for FY2026 (ending March 2026) improved by ¥193 million to -¥1,972 million from -¥2,165 million in the prior period. Corporate expenses decreased by ¥97 million to -¥1,984 million (-¥2,081 million in the prior period). Meanwhile, the elimination amount for inter-segment transactions expanded from ¥3 million in the prior period to ¥75 million. Trends in exploration and development costs accompanying the progress of the Alcaparrosa Mine development project continue to be the main factor driving changes in corporate expenses.

Key Products

Growth Drivers

• Increase in exploration and development costs accompanying the progress of the Alcaparrosa Mine development project (a factor increasing corporate expenses)
• Increase in head office administrative expenses due to the strengthening of public relations and IR functions accompanying the introduction of ROIC management
• Increase in exploration costs accompanying entry into the Oracle Ridge copper exploration project (Arizona, USA)

Risks

• Risk that increased corporate expenses will pressure consolidated operating profit (although corporate expenses decreased by ¥97 million year-on-year in FY2026, ending March 2026, the expense burden remains at approximately ¥2,000 million)
• Risk of further increases in exploration and R&D expenses due to the prolongation and cost overruns of the Alcaparrosa Mine development (borrowing limit amended due to increased development costs)
• Risk that the adjustment amount will fluctuate depending on the scale of inter-segment transactions due to changes in the elimination amount for internal transactions