Sumitomo Corporation is pleased to announce its acquisition of a 20% stake in Oresteel Investments (Proprietary) Limited from Old Mutual Life Assurance Company (South Africa) Limited for a consideration of approximately R500million.

Oresteel is an investment holding company, which holds a 52.28% controlling interest in Assore Limited, which in turn owns 50% of Assmang Limited.

Assmang is a mining company which produces iron ore, manganese ore, chrome ore, manganese ferroalloys and chrome ferroalloys.

This is one of the largest investments from Japan in the mineral resources sector in South Africa.

After this deal, 60% of Oresteel shares are still held by the Sacco Family, one of the founding families of Assmang, 20% is held by Old Mutual and 20% is held by Sumitomo. This new shareholder formation will enhance the relationship between Sumitomo and the Sacco Family.

Assmang is a unique mining company in the world, which holds 3 major raw materials for iron and steel making, namely high grade iron ore, high grade manganese ore and chrome ore.
The newly developed Khumani iron ore mine will bring significant growth in Assmang's iron ore business. The production will commence from 2008 and Assmang's annual production capacity will increase to 16 million tonnes in 2015 from the current 6 million. This expansion project is linked to the expansion of the existing railway line and port and is comparatively competitive in capital and operation cost.

It is also noteworthy that Assmang's reserve of high grade manganese ore, which is essential for the steel industry, is one of the largest in the world. Assmang has great potential for the future development of its manganese business.

Sumitomo considers it is possible to contribute to the iron and steel industries in Japan, China and other regions in Asia where iron ore demand is growing, as Assmang is independent iron ore source, which is at the same time the source of scarce lumpy.

Sumitomo has more than 30 year's history of conducting business with the Assmang group in various areas. Starting with iron ore trade to Japan in early 1970's, the business relationship expanded to manganese ore trading and ferroalloy trading. The two groups also have a joint venture in ferroalloy production.

In 1994, Sumitomo acquired 1% direct share of Assmang, which was the first investment from Japan into the New South Africa. The decision is also based on the recognition that sustainable economic growth would be expected in South Africa.

Sumitomo aims to further reinforce its relationship with the Assmang group, by building new strategic partnerships with the founding family of the group.