Sumitomo Metal Mining cut profit forecast 93 pct on mine writedown
By Yuka Obayashi
TOKYO Feb 5 (Reuters) - Sumitomo Metal Mining on Friday cut its forecast for net profit for the year ending in March by 93 percent to 5 billion yen ($42.81 million) because of plunging metals prices and an investment loss at a copper mine in Chile.
The Japanese company originally forecast overall net profit of 68 billion yen. It expects a loss in ordinary income, which is pre-tax before one-off items, of 4 billion yen for the year to March 31, instead of its earlier forecast of profit of 85 billion yen.
Part of the lower profits is because of an investment loss of 68.9 billion yen on its Sierra Gorda copper mine in Chile amid slumping prices.
The move is the latest in a series of writedowns on resource assets and downgrades of earnings forecasts by miners in the face of a global commodity slump.
JX Holdings, Japanese refiner and miner, said on Wednesday that it expected a record loss of 330 billion yen in the current business year as its oil inventory loss widened and writedowns on oil and copper assets ballooned.
Sumitomo Metal Mining, which holds a 31.5 percent stake in Sierra Gorda, said the writedown was due to falling prices of copper and molybdenum as well as its late start-up of commercial production.
Sierra Gorda, co-owned by Poland's KGHM and Japanese trading firm Sumitomo Corp, produced about 85,000 tonnes of copper concentrate in 2015 and aims to reach full utilisation by the end of June, a Sumitomo Metal Mining spokesman said. ($1 = 116.8000 yen) (Reporting by Yuka Obayashi; Editing by Christian Schmollinger)
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