JX Metals, Mitsubishi Materials, Mitsui Metals, and Marubeni have decided to integrate their copper raw material procurement and sales businesses effective October 1, 2026. Behind this is a challenging international environment with China’s rise and worsening negotiation terms with mining companies, and the Japanese team’s alliance aims to stabilize critical resources and strengthen international competitiveness,,。

Scheme and Implementation System for the Historic Four-Company Integration

On May 28, 2026, four major Japanese non-ferrous metals companies—JX Metals, Mitsubishi Materials, Mitsui Metals, and the general trading company Marubeni—signed a final agreement to consolidate their copper concentrate purchase and sales businesses such as electrical copper. This integration will be centered around the joint venture company Pan Pacific Copper (PPC), in which JX Metals, Mitsui Metals, and Marubeni have already invested,,。 Specifically, a complex scheme was adopted to transfer Mitsubishi Materials’ target business to PPC through a company split, and then transfer it to PPC’s newly established wholly owned subsidiary, PPC Material Co., Ltd.,,。

After this integration, the shareholding ratios in PPC will be 32.50% for JX Metals, 32.00% for Mitsubishi Materials, 21.90% for Mitsui Metals, and 13.60% for Marubeni,,。 As a result, PPC will become equity-method affiliates of each of the four companies, effectively bringing together the major domestic copper business players. The integration is scheduled for October 1, 2026, and is subject to obtaining permits and licenses from authorities such as the Japan Fair Trade Commission,,。 The fact that companies that were once rivals are now integrating the upstream process of raw material procurement with the exit strategy of product sales can be seen as a historic reorganization in Japan’s industrial sector. Please refer to the diagram below.

The Importance of Copper Smelters in Economic Security

One of the main reasons for the urgent integration of this business is the “strategic importance” of copper as a resource. Copper is an essential metal for its excellent electrical conductivity and is essential for modern infrastructure, but in recent years, demand has exploded in advanced technology fields such as AI data center construction, electric vehicle (EV) popularization, and renewable energy facilities,,。 Domestic copper smelters play an extremely important role not only in producing electro-copper, but also in recovering by-products such as gold, silver, platinum, and even rare metals essential for semiconductor materials during the smelting process.

These metal resources can be considered the “lifeblood” that helps Japanese manufacturing maintain international competitiveness. However, as the global competition for raw materials intensified, individual companies could reach their limits in continuing negotiations with mining companies alone. By forming an alliance of four companies, consolidating the volume of copper concentrate procurement and strengthening purchasing power by leveraging economies of scale is an essential measure to maintain a stable supply of resources to Japan. As JX Metals’ President Hayashi expressed a sense of crisis, saying, “The copper smelting business is at risk of survival,” this integration strongly carries the aspect of a survival strategy aimed at protecting the nation’s economic security, going beyond mere cost reduction.

[Background of Management and Strategy] ‘Creating but Not Profitable’—Structural Decline in Profitability

China’s Rise and the Collapse of TC/RC (Smelting Margin)

At the root of the difficulties facing the copper smelting industry lies in changes in the profit structure of the smelting business. Smelting companies’ profits are mainly determined by the fees they receive when sourcing raw materials from mining companies, known as “TC (Smelting Fee)” and “RC (Refining Fee)”,,。 However, the conditions for this TC/RC have significantly deteriorated in recent years. Specifically, the smelting margin, which was about $80 per ton a few years ago, has at one point plummeted to around $20. Behind this is China’s excessive state-led investment, and as China has built massive smelters one after another, fierce competition worldwide is taking place for copper concentrate, the raw material.

As a result, the bargaining power of mining companies, who are suppliers, has overwhelmingly increased, creating a ‘sandwich’ structure where the margins received by smelting companies are compressed to the extreme. Even if copper prices themselves soar, it only benefits upstream mining companies and does not necessarily lead to increased earnings for smelting companies. In such circumstances, the decisive factor is “buying power”—how to secure raw materials cheaply and stably. By uniting four Japanese companies, they are creating a pseudo-giant purchasing organization to compete with the massive capital of Chinese and other companies. Please refer to the diagram below.

Mitsubishi Materials’ Shift from “Quantity to Quality”

Mitsubishi Materials, a key member of the integration, is advancing fundamental structural reforms as a catalyst for this restructuring. In its medium-term management strategy for fiscal years 2026–2028, formulated in November 2025, the company announced the policy of “becoming a company that creates the future through resource circulation business,,。 Until now, the company had large smelting capacity but relatively small mine stakes and adopted a stable model that mined copper price fluctuation risks, but due to the recent deterioration of TC/RC, the traditional business model no longer worked,,。

The new strategy emphasizes “management from quantity to quality,” setting ambitious financial targets of ROE (Return on Equity) of 8% or higher and ROIC (Return on Invested Capital) of 7% or more by fiscal year 2028. To achieve this goal, through this business integration into PPC, we plan to reduce the weight of the smelting business using primary raw materials (copper concentrate), which is easily affected by unstable external environments, and shift management resources toward more profitable recycling businesses. Specifically, we have set an ambitious goal to reduce the processing volume of copper concentrate to 60–70% of the 2025 level by fiscal year 2035, while expanding the processing volume of secondary raw materials such as E-Scrap (waste electronic substrates), which will be discussed later, to 200%.

[Mid- to Long-Term Outlook] Resource Circulation and the Challenge of Green Copper

Scalping Scrap Collection and Expansion of the ‘Resource Circulation Business’

In the future copper business, all companies are commonly finding a way forward in “recycling (resource circulation).” To reduce dependence on natural resources mined from mining, efforts are accelerating to strengthen the collection and processing capacity of E-Scrap generated from used appliances and electronic devices. Japan is also known as a ‘major urban mine’ nation, with strengths in recycling technology and collection networks. In addition to plans to double the processing volume of E-Scrap by fiscal year 2035, Mitsubishi Materials has set ambitious goals to raise the recycling rate of tungsten, a rare metal, to 100% by fiscal year 2030,,。

Utilizing recycled materials not only secures a unique revenue source that is not swayed by strict negotiations with mining companies, but also directly reduces environmental impact. JX Metals also defines its recycling business as the “Metal & Recycling Business,” positioning it as a growth pillar alongside high-performance products such as semiconductor materials. With this four-company merger, the common functions of raw material procurement will be consolidated, allowing each company to combine its expertise and networks in scrap collection to build a more efficient global resource circulation loop,,。

Next-generation competitive strategies leveraging environmental value as a weapon

The ultimate goal beyond integration is to dominate the market of “Green Copper” (low-carbon copper), which adds value to environmental initiatives. Mainly in Western markets, there has been a trend to trade copper, which emits less CO2 during production, at a “premium price,” which is an area where Japan’s advanced smelting technology can be utilized. Mitsubishi Materials aims to achieve carbon neutrality by 2045 and has set a goal to generate renewable energy equivalent to its own electricity consumption by fiscal year 2050.

Stabilizing the revenue base through integration is also a prerequisite for continuing such large-scale environmental investments. Recycled copper with low-carbon smelting processes and traceability will become essential for being prioritized by environmentally conscious global companies like Apple and Tesla in the future. Japan’s copper business is evolving from merely providing materials to an infrastructure industry that offers environmental value and resource security, using the structural reform of the current “four-company alliance” as a stepping stone.

[#経済安全保障 #銅 #三菱マテリアル #JX金属 #資源リサイクル #脱炭素 #製造業再編 #経済ニュース]