Mitsui Mining May Raise Profit Forecast on Higher Zinc Prices

Monday, August 28th 2006

Mitsui Mining & Smelting Co., the world’s biggest maker of copper foil, may raise its profit forecast on higher zinc prices and increasing demand for conductive film used in liquid-crystal displays, Chairman Shimpei Miyamura said.

“The display-related business will be better in the July to September period,” Miyamura said in an interview yesterday. The Tokyo-based company also expects higher earnings from its mining division, he said.

Miyamura didn’t provide figures for any possible increase in Mitsui Mining’s profit forecast. The company predicted net income of 20 billion yen ($172 billion) for the first half and 30 billion yen for the full year through March 31, 2007.

Prices of zinc, used to protect steel from corrosion, have more than doubled in the past year driven by demand led by China. Copper, used in electrical wires and pipes, reached a record in May. BHP Billiton Ltd., the world’s biggest mining company, today said copper, one of the metals that’s used in conductive film for flat panels, may extend its gains because of falling stockpiles and demand from manufacturers and steelmakers.

Zinc prices have exceeded Mitsui Mining’s estimate of $2,500 a metric ton, boosting profit at its mining business, Miyamura said. Prices of zinc for immediate delivery on the London Metal Exchange jumped as much as 2.1 percent to $3,415 a metric ton.

Mitsui Mining shares on Aug. 7 had their biggest drop in six month after the company cut its outlook for first-half operating profit, citing reduced demand from liquid-crystal display makers. Today they rose as much as 1.6 percent to 680 yen on the Tokyo Stock Exchange.

Source: www.bloomberg.com