MITSUBISHI MATERIALS CORPORATION

Business Details

This segment centers on the smelting and sale of copper, gold, silver, lead, tin, palladium, and other metals. In addition to the Company itself, Onahama Smelting & Refining Co., Ltd., Material Eco-Refine Co., Ltd., Hosokura Metal Mining Co., Ltd., and PT Smelting (equity-method affiliate) engage in smelting operations. The segment also encompasses the home appliance recycling business (East Japan Recycling Systems Co., Ltd.) and strategically promotes the expansion of a resource recycling network including E-Scrap. In FY2026 (ending March 2026), higher copper and gold prices contributed positively, while deterioration in purchase terms (TC/RC) and a decline in gold production had negative effects.

Recent Overview

Ordinary income increased on higher copper and gold prices, but a large impairment loss was recorded following the decision to halt operations at the Onahama Smelting & Refining Plant

In the Metals segment for FY2026 (ending March 2026), ordinary income improved substantially to ¥57,066 million (up 38.6% year on year), driven by higher copper and gold prices, increased dividends received from mining operations, and improved investment income under the equity method. On the other hand, revenue from external customers declined significantly to ¥940,464 million (down 21.8% year on year) due to a decrease in gold production volume and deterioration in purchase terms (TC/RC). As part of a fundamental structural reform, the Company decided to halt copper concentrate processing and related facility operations at the Onahama Smelting & Refining Plant by the end of March 2027, and recorded an impairment loss of ¥20,361 million. Note that following the organizational restructuring in April 2026, this segment will be reclassified under the "Materials Domain."

Key Products

Growth Drivers

• Rising prices of non-ferrous metals such as copper and gold (higher copper and gold prices significantly boosted ordinary income in FY2026 (ending March 2026))
• Increase in dividends received from mining operations (higher dividends from equity-method mining companies supported ordinary income)
• Improvement in investment gains/losses under the equity method (equity-method investment income rose sharply from ¥1,490 million in the prior period to ¥7,429 million)
• Increase in secondary raw material processing volume through expansion of E-Scrap processing and strengthening of the resource recycling network
• Reduction in fixed costs and improved profitability through fundamental structural reform (including the halt of operations at the Onahama Smelting & Refining Plant)
• Expansion of secondary raw material smelting, the resource recycling loop, and tungsten recycling through reorganization into the Materials Domain

Risks

• Compression of smelting margins due to deterioration in purchase terms (TC/RC) (continued deterioration in FY2026 (ending March 2026))
• Risk of decline in gold production volume (revenue declined significantly year on year due to mine operating conditions, declining ore grades, etc.)
• Risk of fluctuations in non-ferrous metal prices such as copper and gold (a direct impact on revenue and profit in the event of price declines)
• Foreign exchange risk (a strong yen adversely affects export profitability and foreign-currency-denominated earnings)
• Risk of impairment of fixed assets (a large-scale impairment loss of ¥20,361 million was recorded in the Metals segment in FY2026 (ending March 2026))
• Risk of transition costs and additional expenses arising from the halt of operations at the Onahama Smelting & Refining Plant (¥3,989 million in structural reform costs was recorded under Other Businesses)
• Geopolitical and country risk (dependence on overseas smelting operations such as those in Indonesia)
• Risk of deteriorating business environment due to intensifying competition with overseas smelting companies