Japan’s JXTG raises profit forecast despite $1.2bn charge

Caserones belongs to JX Nippon Mining & Metals, Mitsui Mining and Mitsui & Co., and it’s run by Lumina Copper. (Image courtesy of Lumina Copper Chile.)

Japan’s JXTG Holdings Inc on Wednesday raised its net profit forecast by about 12 percent for the ongoing fiscal year despite an impairment loss of 125 billion yen ($1.2 billion) at its Caserones copper mine in Chile due to higher production costs.

The Japanese energy and metals company said annual net profit for the year ending March 31 would touch 335 billion yen, against an earlier estimate of 300 billion yen. The revised estimate, however, falls short of a mean forecast of 354 billion yen net profit by eight analysts surveyed by Thomson Reuters I/B/E/S.

JXTG, which has a 51.5 percent stake in the Caserones mine, said production cost had risen as some parts of the operation have yet to stabilize, and it needs more funds to help accelerate output.

Mitsui Mining and Smelting Co Ltd and Mitsui and Co own the remaining stake.

The company has also discounted risks from lower output during the winter and increased environment costs, it said in a statement.

Output at the Caserones mine, located in the arid mountains of northern Chile, has fallen behind schedule since it started producing in May 2014.

The problems at the mine highlight the challenges facing miners in the country as they scrabble through far-flung locations now as more accessible deposits have largely been tapped out.

($1 = 105.6300 yen)

(Reporting by Yuka Obayashi; Editing by Kim Coghill and Biju Dwarakanath)

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