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Corporate Communications Staff Explores the World

Coal Business in Australia

  • Australia
  • Mineral Resources, Energy, Chemical & Electronics Business Unit
  • Mineral Resources

November 2011

Takeshi Nomura
Publications Team,
Corporate Communications Department

Takeshi Nomura joined Sumitomo Corporation in 1993. He acquired experience in a variety of sections, including the Accounting Controlling Department I, which was his first assignment, the Building Materials Department, the Import Housing Business Office, the Materials Business Department, and the Consumer Distribution Business Department (currently the Retail & Wellness Business Department) before being assigned to the Corporate Communications Department. Once belonging to Mami Mart, a supermarket chain operating in Saitama Prefecture, and Sumisho Net Super K.K., his philosophy is "thinking from the consumer's perspective." This 42-year-old treasures his family.

Coal "Ginza" in Australia

In the state of Queensland, Australia, there is an area where many large coal mines are located—we call it, "Coal Ginza" (in Japan, the names of many places have the "Ginza" suffix attached. Most of these places are popular busy districts and are therefore named after the upscale Ginza shopping district in Tokyo). It is this Ginza-like area in Queensland that Sumitomo Corporation has invested in the Rolleston coal mine.
Since leaving the port town I visited the previous day, I was on the road for more than four hours on an apparently endless one-lane course that spanned a vast stretch of land when the Rolleston coal mine suddenly came into sight. Reportedly, this open pit coal mine possesses a 4- to 5-meter coal seam in an area located tens of meters below ground. The surface of this land is mined for coal. Coal is formed from plant matter that was present nearly a billion years ago and that carbonized after being buried in the earth before decay and decomposition processes were completed. In this sense, coal can be considered as a gift from the ancient world.

Burrowing through the ground with enormous heavy machinery. The lower picture shows the shovel from this heavy machinery.

The size and scale of this machinery may be beyond your imagination. The black surface represents the coal seam.

Coal business and integrated trading company

Japan was the world's largest coal importer during the period of its rapid economic growth and the Japanese market was very attractive for coal exporting countries. Trading companies took advantage of the momentum and engaged in trading to the fullest extent. As the times changed, however, so too did the functions expected of trading companies. "In order to secure resource supplies for Japan, we became inclined to acquire mining rights in overseas resource assets (upstream investments) in line with national interests," said Kenji Hashimoto, President of Sumisho Coal Australia Pty. Ltd. (SCAP)detail. "On the other hand, we have stepped up our efforts in developing markets that include China, which has ultimately replaced Japan as the largest coal importer, and India, which also has a strong demand for coal," he added, referring to the great possibilities for Sumitomo Corporation's coal business that aims at integrated industry involvement, including investments in superior assets, securing returns, and transporting and selling coal produced at company-owned coal mines. His enthusiastic discourse, which excited me as an interviewer, is reinforced by his long years of experience in the business.

SCAP President Kenji Hashimoto, very passionate when discussing the coal business

As a field-oriented man—a trading company employee and coal miner

"The incident is not happening in a meeting room, but in the field" is a now-famous line from a Japanese drama. That impression represents what Kazuteru Mogi (an expatriate from Sumitomo Corporation in the Resources Department at Sumitomo Australia Pty Ltd) has exemplified in the coal business of Sumitomo Corporation. For about a year from July 2010, he was assigned to become a trainee(*) at two coal mines owned by Sumitomo Corporation and to experience diverse tasks in various sections of a partner operations company. He not only experienced open pit mining but also mining operations 150 meters below the ground.
"For future resource investments, we need to know more about the field," he states confidently.
*Training system in our overseas offices

Kazuteru Mogi of Sumitomo Australia, who may look better with a helmet than anybody else at Sumitomo Corporation

An employee accommodation located very close to the coal mine, and where Mogi once stayed.

Engaged in the Entire Coal Business

The greatest issue that needs to be addressed in distributing the vast output of coal extracted from "Coal Ginza" is the inadequacy of port and railroad infrastructures. Coal from the Rolleston coal mine is transported by rail to the Port of Gladstone, 420 kilometers away. The port's capacity for handling coal is very limited in comparison with the volume of coal output. Sumitomo Corporation has therefore invested in the Wiggins Island Coal Export Terminal, which will jointly be constructed in the Port of Gladstone by several coal shippers, to promote the construction project for handling larger volumes of coal. Mining coal, finding markets for coal, and transporting coal—Sumitomo Corporation is working in the entire coal business.

Japan is the world's second largest importer of coal. The dominant share of Japan's coal imports (60-plus %) come from Australia. I felt vigor in the workplace and passion from the people working there in their quest to provide a continuous stable supply of resource energy.
Although not exactly treasure hunting, the business of coal, a resource left to us by ancient earth, seems full of dreams and romanticism.
I, as an employee of Sumitomo Corporation, felt charged with "coal energy," after seeing my fellow employees working hard in Australia.

Exporting coal from the Port of Gladstone, about 420 kilometers away from the mine

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