Notice Regarding the Recognition of Impairment Loss on Fixed Assets (Extraordinary Loss) and Changes in Subsidiaries (Designation as Specified Subsidiary)

Regarding the Recognition of Impairment Loss on Fixed Assets

Mitsubishi Materials Corporation has decided to suspend operations of the copper concentrate processing at Onahama Smelting Co., Ltd. in the consolidated financial results for the fourth quarter of the fiscal year ending March 2026. Consequently, it is expected to record an impairment loss of 21 billion yen primarily on fixed assets of the smelter. The copper smelting business is facing profitability decline due to intensified overseas competition and worsening terms of copper concentrate purchases from mining companies, and this measure is part of a fundamental structural reform. Meanwhile, processing of E-Scrap and shredder dust will be transferred to other sites, and the electrolytic and PGM plants will continue operating.

Regarding Subsidiary Capital Increase (Designation as Specified Subsidiary)

Since Onahama Smelting Co., Ltd. is expected to become insolvent due to the impairment loss, Mitsubishi Materials will conduct a capital increase of up to 23 billion yen by converting loans to common shares to strengthen the financial base and improve profitability. The capital after the increase will amount to up to 29.9 billion yen, and it will continue to be a wholly owned consolidated subsidiary designated as a specified subsidiary. The capital increase is planned to be completed by the end of June 2026 and is expected to have a minimal impact on the consolidated full-year financial results for the fiscal year ending March 2026.