Sumitomo Corp., Japan's third-largest trading company, will spend 30 billion yen ($279 million) to increase its stake in iron ore, chrome and manganese miner Assmang Ltd. to secure supplies of the steelmaking materials.
The investment increases the Tokyo-based company's share of Assmang's holding company to 49 percent, boosting its interest in the South Africa-based miner to 13 percent from 8 percent, Sumitomo said today in a statement on its Web site.
Sumitomo and rivals including Mitsubishi Corp. and Mitsui & Co. are increasing stakes in mines and resource companies from Australia to Africa, South America and the U.S. as climbing demand for steel and copper in China intensifies competition to procure raw materials. Demand for manganese and a power shortage that crimped output in South Africa, the world's biggest producer, has caused prices to quadruple to a record in the past year.
Nippon Denko Co., Japan's biggest ferroalloy maker, in February agreed to pay a record $11.20 per 1 percent manganese contained in a metric ton of ore in the year started April 1. That compares with $2.70 for the year ending March 31. Manganese is used to make steel tougher.
Source: Bloomberg
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