3

SUMITOMO METAL MINING CO., LTD.

Annual Report 2009

Foundations of Growth

Business resources:the strengths underpinning our growth strategy

The business resources underpinning SMM’s strategy are the key factors that will enable us to attain our

strategic growth objectives and the source of our highly competitive market position. Handed down

over more than 400 years of Sumitomo corporate history, the Sumitomo Business Spirit forms an intan-

gible but robust foundation. The other key factors are our human resources and our technology, which

support excellence in our exploration, production and R&D activities. Going forward, we will continue

to hone our competitive advantage by investing in these resources as we target further growth.

A long history in mining

Niihama, Ehime Prefecture: Kanki-ko (literally “pit of exultation”) was the first shaft dug at the Besshi copper mine in 1691. The name echoed the joy at its discovery. Today it slumbers amid woodland.

Annual Report 2009

Sumitomo had already been in the copper smelting business

for around 100 years when it began working the Besshi copper mine.

It operated continuously for 283 years,

during which time the managers faced crises due to fire

and flood as well as smoke-related damage to the smelter.

They overcame all of these problems with intelligence,

courage and resolve, adding to Sumitomo’s skills in mine management.

Over many decades of operation, the Besshi mine helped

Sumitomo to develop a strong business ethos based on integrity and trust.

Today, the same spirit and resolve infuses the managers of SMM.

An inherited base of mining expertise

Isa, Kagoshima Prefecture: A mining engineer sketches a rock formation at the Hishikari mine. Over time, careful surveying leads to the discovery of new ore deposits.

Annual Report 2009

7

The job of mining engineers is classified into different aspects,

from discovery, analysis and evaluation of new deposits based

on geological surveys to ore extraction and the application

of grade-enhancing techniques.

At the Hishikari Gold Mine, our mining engineers spend three years

learning basic techniques, along with associated expertise in safety

management, process management, operational supervision and budgeting.

Next they transfer to a mine outside Japan to gain more technical and

operational expertise.

The training process takes around 10 years to produce

a full-fledged mining engineer.

The results of this training are evident in the success that we have achieved

in overseas exploration projects and mining operations.

8

Passion-driven global competitiveness

Saijo, Ehime Prefecture: At the Toyo smelter, molten copper is poured into casting molds to make anode copper for electrorefining. At this stage the purity is about 99%.

Annual Report 2009

9

Based on in-house technology, we have developed the proprietary

Sumitomo method burner for use in the flash furnaces

at the Toyo Smelter & Refinery, where we apply pyrometallurgical

processes to smelt copper.

This technology realizes world-class performance in terms

of the amount of ore concentrate that can be melted

within a certain time. We work round the clock to continue

improving this technology.

The passion we have inherited from Sumitomo’s long tradition

in manufacturing helps us make products of world-class quality

and remain highly competitive in the marketplace.

10

future innovation

Niihama, Ehime Prefecture: A material is tested inside a fume cupboard at our research facility in Niihama. We have been conducting metallurgical research to create new materials for over 300 years.

Annual Report 2009

11

SMM subsidiary Coral Bay Nickel Corporation (CBNC) pioneered

commercial nickel recovery from low-grade ore based

on HPAL (High Pressure Acid Leach) technology.

Our nickel refining operations in Niihama use an advanced technique called

MCLE (Matte Chlorine Leach Electrowinning).

These technical strengths are the result of our constant focus on R&D.

We remain committed to developing effective new metallurgical techniques

to improve our copper smelting and other refining processes further.

We are also applying expertise with metals in our ongoing

R&D into electronic and other advanced materials.

Our nickel-related technologies are enabling us to develop

battery materials and materials with environmental applications.

12

business with sustained growth potential.

Reflecting this heritage, we follow a training-oriented management approach. We are striving to cultivate

a corps of dedicated and highly skilled engineers: the mining engineers who will support the future of our

resources operations; the production engineers who will build and maintain a world-class production set-up;

and the new product development engineers focused on making new, ground-breaking technical discoveries.

We have also set up and continue to upgrade company-wide HR development programs aimed at cultivating

middle managers and executive management.