Company history

The Sumitomo house had been smelting copper in Kyoto since the late sixteenth century, and it held an unusual asset for the trade: nanbanbuki, a method for separating silver out of crude copper that no rival could match. That expertise led it to the ore. In 1690 the house located the Besshi deposit, took a licence from the shogunate, and began mining in 1691 in what is now Ehime.

What followed made Besshi something more than a mine. For over two centuries its copper was the cash that Sumitomo distributed into everything else it owned — the machinery works, Sumitomo Chemical, Sumitomo Electric, Sumitomo Forestry, Sumitomo Bank. The 1882 house code called Besshi an imperishable capital asset, and until the 1890s the house was, in commercial terms, Besshi plus a money-lending business. Under Hirose Saihei the mine was rebuilt on Western technology — the French engineers Coignet and Louis Larroque surveyed it and drafted its modernization plan, wet-process precipitation copper followed in 1876, and then rock drills, a dedicated mine railway, aerial ropeways, hydroelectric power, electrolytic refining and flotation. Output rose to among the largest in Japan.

It also produced the country’s longest-running pollution dispute. Moving the smelter offshore to Shisakajima in 1905 did not stop the sulphurous smoke; compensation ran past ¥5 billion, in the prices of 1968 when the figure was tallied, before a neutralization plant finally settled the matter in 1939. Meanwhile the ownership form kept changing around the ore. The head office partnership became Sumitomo Goshi in 1921, and in July 1927 the parent ended 236 years of direct family operation by incorporating the mine as Sumitomo Besshi Mining. A 1937 merger with Sumitomo’s coal arm produced Sumitomo Mining; the occupation-era break-up renamed it Kikka Mining in 1946, and in 1947 it bought out the group’s metal mines — the Konomai gold mine chief among them — and the Kunitomi smelter as the zaibatsu holding company was dissolved.

The independent company dates from 1950, when the metals division was split out as Besshi Mining and listed; it took the name Sumitomo Metal Mining in 1952, fixing its place in the postwar Sumitomo group as the non-ferrous house. The next two decades were spent building capacity downstream of the ore: a nickel-smelting subsidiary at Hyuga in 1956, a central research laboratory in 1965, the Ome plant in 1967 that carried it into electronic materials, a new Niihama nickel works in 1970, and the Toyo smelter in 1971.

The reason for building downstream was that the upstream was closing. From 1962 the domestic mines went one after another, squeezed between falling ore grades and, later, a rising yen — an ore body that cannot be relocated has no answer to either. The company’s response was not to defend the mines but to redefine what it was: buy ore on the world market, and make the margin in Japan through smelting and processing. That was a change of self-definition as much as of assets, from a resource company to a materials company, and it set the shape of everything that came after.

In March 1973 Besshi closed, 282 years after the first licence. The company that the 1927 incorporation had created went on without the mine that had created it, its centre of gravity now in imported feed and domestic smelting. But the mining identity survived, and it survived because of a claim almost nobody had wanted. In 1969 the company had picked up the Hishikari block in Kagoshima for $27,778 (¥10m) — the board was lukewarm, and the push came from engineers whose morale was being ground down by a decade of closures.

Nothing much happened for a decade. Then the state Metal Mining Agency drilled it from 1980 and all eighteen holes hit gold. Production started in July 1985 at roughly six tonnes of gold a year against some 250 tonnes of estimated reserves, making Hishikari the only commercially producing gold mine in Japan — and, at grades that had no domestic peer, a durable earner whose cash the company put into research for its diversifying businesses. President Fujisaki Akira had told the company for years never to let the Kyushu block go. It was also where the mine engineers were trained who would later be sent to run operations overseas.

That was the point at which buying equity in other people’s ore became strategy rather than opportunism: a stake in the Morenci copper mine in the United States in 1986, shares in PT International Nickel Indonesia in 1988, production at Pogo in Alaska from 2006, and a stake in the Philippines’ Nickel Asia in 2009. Each one spread the resource base across more geographies and cut the dependence on any single jurisdiction — the portfolio answer to the problem that had killed the domestic mines.

In 2011, with Sumitomo Corporation, the company took a share of Sierra Gorda in Chile — about US$2.9 billion to raise a mine with 1.3 billion tonnes of recoverable ore out of bare ground. Metal prices were high and the visible risk was the opposite one: a smelting business with no equity in ore of its own slowly running out of feed. What was misjudged was not the price outlook but the difficulty of the build. Start-up slipped a year to July 2015, straight into the copper price collapse, and operations were unstable from the beginning. Two impairments followed — equity-method losses of $633.4M (¥69bn) and ¥79.9 billion, together over ¥140 billion — and the year ended March 2017 closed at a net loss.

The stake went to Australia’s South32 in 2021 for a gain of $677.5M (¥74bn) — barely half of what the mine had cost in write-downs. The target it had been bought to serve, 300,000 tonnes of equity copper, was not lowered; the money and the crews were moved to Quebrada Blanca instead. The lesson taken was about timing and screening rather than direction: sensitivity to price and currency, and the discipline of when to break ground, became explicit parts of how a multi-hundred-billion-yen project is approved.

The medium-term plan published in February 2022 set the current shape — expand nickel-based cathode materials for electric vehicles while pushing three resource projects in parallel: Pomalaa in Indonesia, Quebrada Blanca in Chile, and Côté in Canada. Quebrada Blanca opened in October 2023 and Côté reached commercial production in August 2024; the Côté stake of roughly 30 per cent had been bought in 2017 for $191.7M (¥22bn), shelved when gold was weak, then restarted when the price recovered in 2020, with loans to the operating subsidiary reaching $877.9M (¥133bn) by March 2024. Nickel smelting, feed from the Philippines and Indonesia, and cathode manufacture now form a single vertical chain — the same move as 1962, made once more: refuse to be only a miner, and earn the margin further down.