TOKYO, Feb 9 (Reuters) - Sumitomo Metal Mining on Monday lifted its full-year net profit forecast by 89% thanks to higher copper and gold prices, adding that it remains in talks with global miners to secure treatment and refining charges (TC/RCs) above China's benchmark.
The miner and smelter now expects net profit for the year ending March 31 to reach 140 billion yen ($893 million), up from a November estimate of 74 billion yen.
"The revision is primarily due to stronger metal prices such as gold, copper and nickel, as well as a weaker yen, which boosted inventory valuations," Executive Officer Yasuhiro Miyake said.
Net profit for the nine months through December more than tripled to 108.2 billion yen from 29.6 billion yen a year earlier.
Miyake said the company revised its shareholder remuneration policy in response to investor calls for higher returns. Sumitomo Metal set an appropriate equity ratio target at 55%, down from 60% at the end of the previous fiscal year. It is seeking to reach 58% by the year that ends in March 2028.
It will raise its minimum dividend-on-equity ratio to 3.5% from 2.5% and continue its share buybacks flexibly. As a result, the company raised its dividend forecast to 183 yen per share, up 52 yen from its prior projection. It paid out 104 yen per share last year.
Regarding TC/RCs negotiations with global miners for 2026, Miyake said talks were continuing and the company was seeking terms above those set in China at $0 per metric ton and 0 cent per pound. He declined to comment further.
TC/RCs, or fees paid by miners to turn concentrate into refined metal, have come under pressure as global smelting capacity - led by China - has expanded faster than mined supply, squeezing smelters' margins.
Asked whether Sumitomo Metal plans to cut production, Miyake said: "Since our Toyo plant boasts exceptionally high productivity, we believe maintaining current operating levels is the most profitable course for our company and therefore we have no plans to reduce production."
(Reporting by Yuka Obayashi; Editing by Thomas Derpinghaus)
By Yuka Obayashi
