Ann: Board Changes-PDY.AX, page-37

Mitsubishi

Lower grade


The Japanese giant has minority stakes in numerous thermal coal mines in NSW, including Rio Tinto's Warkworth and Hunter Valley Operations mines, plus Glencore's Ulan mine.
The company is also involved in a uranium exploration play in WA, and has exposure to iron ore in Western Australia, having taken over development of the failed Oakajee Port and Rail project in WA's mid-west region.
The Oakajee project was supposed to open up a new iron ore province to rival the Pilbara, but with a high construction cost and most of the iron ore in the region being lower grade, the infrastructure project and most miners in the region were among the first victims of the iron ore price slide.

Future development of the project and the nearby iron ore deposits appears highly unlikely, given projections for iron ore prices and continuing supply growth from the world's three biggest miners of the bulk commodity.
In its most recent set of financial accounts, Mitsubishi Development confirmed it had impaired the carrying value of the Oakajee project by $174.8 million, which represented the entire book value.
Mitsubishi also wrote down most of the value of the Crosslands iron ore tenement the company had planned to feed into the project.
Crosslands' previous carrying value of $366 million was cut by $325 million.

Total impairments of $661 million were recorded against the carrying value of Mitsubishi Development's portfolio in the year to March 31.


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