Mitsui Mining Company, Limited Business Information, Profile, and History

History of Mitsui Mining Company, Limited

Mitsui Mining Company, Limited is one of the oldest components of the vast Mitsui zaibatsu, or conglomerate, the mining of coal having played an important role at Mitsui since the last quarter of the 19th century. Mitsui is still the largest coal-mining company in Japan, though the organization's overall size was much reduced in 1950 by the forced spin-off of its metal mines into a separate company, Mitsui Mining & Smelting Company, and by the relative insignificance of coal in Japan's current energy strategy. To counteract the effects of its exhausted mines and shrinking customer base, Mitsui Mining, like many other Japanese suppliers of raw materials, has developed an impressive array of alternative products, many of them high-tech. Half of Mitsui Mining's sales are generated by such items as cement, building materials, and liquefied petroleum gas, while on the horizon are innovations in pollution-control equipment and alumina filament fiber.

For centuries, the house of Mitsui had been one of Japan's leading retail and banking families. Following the restoration of the Emperor Meiji in 1868, The Mitsui Bank in essence took on the role of Japan's national bank, and was soon exploring further opportunities in the newly opened Japanese economy. At the government's urging, the Mitsui interests established a trading company, Mitsui Bussan Kaisha, to stimulate Japan's foreign trade, upon which the country's future economic health would depend. Among Mitsui Bussan's earliest exports were rice and coal, the latter purchased at cost from the government's huge Miike mines on the island of Kyushu. In 1876, its first year of operation, Mitsui Bussan exported 27,000 tons of coal from the Miike mines; nine years later that figure had jumped to 1.8 million tons, the bulk of it shipped to factories throughout China, especially in Shanghai, and to Asian ports as fuel for steamships. At the same time, Mitsui began mining limited quantities of nonferrous metals like zinc, copper, and lead, as well as gold and silver.

In 1888, the Japanese government, anxious to promote rapid industrialization by strengthening the country's leading industrialist families, put its Miike mines up for sale. Mitsui outbid its rival, Mitsubishi, by a tiny margin and took over the mines, which were easily the nation's largest. Along with the rich coal reserves Mitsui also gained a second valuable resource, an engineer by the name of Takuma Dan, director of the mines since 1881. Dan had earned a degree in mining engineering from the Massachusetts Institute of Technology and was a highly talented production manager and administrator. He recommended to his new employers that a series of improvements be made at Miike, chiefly to protect the mines against periodic cave-ins and flooding. Under Dan's guidance, the mines were reinforced and provided with an enormous water pump to keep them dry, measures which quickly increased productivity and reduced mine shut-downs. Though the mines also became a safer environment for the many thousands of workers, employee welfare was far from a priority of the Mitsui managers. The Miike mines were manned with a combination of eta, the Japanese counterpart of Hindu "untouchables," and prison laborers; neither group was treated tolerably. Work conditions were brutal, wages low--or nonexistent for convicts--and any tendencies toward unionism were stamped out with the help of such ultra-nationalist organizations as the Black Ocean Society, which put its thugs at the disposal of large employers in return for payoffs and political clout.

Not surprisingly, the Miike mines were immensely profitable, and Mitsui soon added the equally rich Kamioka deposits, a treasure mountain of zinc and lead with traces of cadmium, silver, and copper. Other coal mines were bought in the Miike area and on the northern island of Hokkaido, and soon Mitsui's team of six coal mines was producing over one-quarter of Japan's total. When Japan went to war in 1894 to 1895 with China, and ten years later with Russia, the Mitsui mining interests benefited from the vastly increased demand for lead, sulfur, and iron needed in the manufacture of munitions. At the same time, Mitsui was able to use its gold reserves, mainly extracted from its Kushikino mine, to stabilize income dependent on the fluctuating prices of its base metals, hoarding gold when base metal prices were high and then selling it when base prices dropped. So critical was the mining of coal and metals to Japan's rapid industrialization that Mitsui and the other great zaibatsu were able to erect their immense business empires on a foundation of mining profits, as well as on the control of raw materials at their source. Both Mitsui and Mitsubishi began their subsequent vertical integration from the ground up, quite literally. In 1892 Mitsui, recognizing the great importance of its mining interests, gathered most of them together into Mitsui Mining Company (MM), which would remain one of the zaibatsu's three pillars of business for many years to come.

In the midst of this prosperity, however, working conditions for Mitsui's thousands of miners remained abysmal. According to Shizue Ishimoto, wife of an engineer employed at the Miike mines, the miners were reduced to a state of semi-slavery, working 12 to 14 hour days--with very few holidays--to earn enough money merely to survive, housed in tiny shelters without basic amenities, and physically bullied into compliance with the existing order. Men, women, and children all worked together in the mines, children especially valued for their ability to work in the narrowest and most cramped quarters. Union organization was stifled by legislative, intellectual, and physical coercion. Not until 1924 was there a strike at Mitsui's Miike mines, but at no time then or afterward did organized labor threaten the absolute power of the zaibatsu.

World War I proved a great boon to Japan's developing industry, its ships, weaponry, and steel all in demand by the belligerent powers. Even better was the following decade, in which a booming world economy stimulated further expansion and consolidation of Japan's overseas trade. It was clear to all observers that Japan's future as a modern capitalist country depended on access to raw materials and strong overseas markets, both of which, it was tempting to suppose, could best be secured by means of colonial expansion. Japan accordingly embarked on a program of overt and threatened aggression throughout Southeast Asia and China, where MM established a series of mines and refineries during the latter part of the 1930s. The gradual gains of Japanese labor were more than offset by MM's importation of thousands of forced conscripts from occupied China and Korea. MM would eventually become Japan's largest user of such prison laborers, whose numbers reached more than 750,000 by the end of World War II.

By the beginning of full-scale hostilities in China in 1937, MM was Japan's leading producer of coal, nonferrous metals, explosives, chemical weapons, and petroleum refined from coal. Japan's lack of oil reserves made the production of synthetic oil from coal particularly essential to its war effort, and in 1941 Mitsui Chemical was created by MM to shoulder these duties, as well as the manufacture of chemical-based munitions. Like all of the Mitsui companies, MM was soon put under the direct control of the Japanese government and became the nation's leading supplier of lead for bullets and, via Mitsui Chemical, sulfur for explosives. It would be hard to gauge the profitability of these activities, which without a doubt kept MM's mines and refineries busy yet ended in the total destruction of Japan as an economic power. By the end of the war, MM executives at least had the comfort of knowing that the bulk of their assets lay far underground, safe from ravages of Allied bombing.

The Allied occupation forces under General Douglas MacArthur sought to encourage democracy in Japan, as well as to destroy its capacity for war, by systematically breaking up the handful of great zaibatsu that controlled nearly all economic activity in the country. Among the Mitsui companies targeted for dissolution was MM, which in 1950 was split into two new firms, Mitsui Mining Company, Limited and Mitsui Mining & Smelting, Co., Ltd. The latter was given all of Mitsui's non-coal mining interests, while the former remained Japan's leading producer of coal and related products. U.S. foreign policy makers soon lost interest in the abolition of the zaibatsu, becoming more concerned about the threat of Asian communism, and the many Mitsui companies were tacitly encouraged to regain their former strength by means of a new, less formal organization known as the keiretsu. Aided by the prodigious growth of the Japanese economy in the 1950s, MM and its fellow Mitsui affiliates gradually rebuilt the Mitsui empire, in which MM continued to play an important role as one of the group's oldest constituents.

The growing importance of petroleum in the world economy posed insoluble problems for MM, however. More industries, utilities, and transport vehicles ran not on coal but on oil and gasoline, while at the same time MM's coal was becoming progressively more expensive to mine. MM, with the help of Mitsui keiretsu member Dai-Ichi Bank and the group's general solidarity, began a slow process of contraction and retrenchment. It closed down its least productive Japanese mines, sought additional coal supplies overseas, and developed over the following decades a number of profitable alternatives to mining, chiefly cement, coke refining, and liquefied petroleum gas production.

The cost in human terms of such a rearrangement of assets was driven home by the great strike of 1960, one of the most important labor struggles in the history of Japan. Unions had made great inroads at MM's Miike mines during the postwar period, winning a 114-day strike after the Korean War and later proving intractable when MM asked for sharp cuts in the number of its employees. In 1959 the Japanese government called for new reductions in the price of coal to match oil's relative cheapness, and to meet the government demand MM's president Kan Kuriki asked his union for a massive "voluntary retirement" of workers. The union refused and began a strike that would last for the better part of a year and attract greater publicity than any other in the postwar era. Both sides poured immense amounts of energy and money into the battle, but the combined pressure of cold war resistance to anything that smacked of Marxism and MM's traditional reliance on right wing coercion proved too much for the union. MM went on in the following decade to halve its work force while tripling its rate of production per employee, using modernized equipment to extract coal faster and more efficiently. In doing so, the company incurred charges of unsafe working conditions, an allegation borne out by the November 9, 1963, explosion at Miike which killed 458 workers and injured another 800. The accident was the worst in Japanese mining history and one of the worst ever recorded, and resulted in a series of lawsuits that dragged on until 1987, when each of the victims' families was awarded the modest sum of US$1,800.

After the 1963 disaster, President Kuriki resigned in disgrace and was replaced by Okito Kurata, a labor expert who led MM's formerly truculent workers into the new era of cooperation and harmony. Indeed, the 1960 strike at Miike seems to have been a watershed in Japanese labor relations, marking the end of adversarial conflict and the beginning of a renewed commitment to higher productivity at all costs. The company's safety record did not improve--between 1965 and 1984 another 500 miners were killed at explosions at six Mitsui mines--but productivity advanced from 15 tons per worker-month to more than 80 tons in 1970, and MM has not been troubled by further labor disagreements.

Like many other Japanese competitors in basic industries, MM has developed an increasing number of high-tech improvements of its raw products. By relying on the indirect but firm support of the entire Mitsui group, MM has been able to survive the double blow of higher coal-mining costs and the rise of oil and atomic power as preferred sources of energy. It has been a leader in advanced mining methods, such as the hydraulic technique it helped pioneer in the early 1970s, but of greater long term significance have been its moves into related industries such as cement and coke production. Cement and building materials comprise 20% of MM's sales, while coke and its by-product, liquefied petroleum gas, contribute another 34%. MM has joined many of its fellow manufacturers in Japan by coming up with more exotic high-tech innovations such as alumina filament fiber and various pollution-control devices. In the future, the company will no doubt concentrate on these highly engineered products, while coal and other simple commodities are left to less developed countries.

Principal Subsidiaries: Mitsui Mining Overseas Co., Ltd.; Sanbi Mining Co., Ltd.; Mitsui Mining Engineering Co., Ltd.; Kinken Quarry Co., Ltd.; Hokusetsu Building Materials Co., Ltd.; Tosa Sanko Macadam Co., Ltd.; Sanko Boring Co., Ltd.; Sanko Construction Co., Ltd.; Sanko Construction & Industry Co., Ltd.; Sanko Construct Administration Co., Ltd.; Sun Building Co., Ltd.; Sanko Forestry Co., Ltd.; Sanko Wood Co., Ltd.; Sun Chemical Company Ltd.; Mitsui Kozan Chemicals Co., Ltd.; Mitsui SRC Development Co., Ltd.; Hita Ready Mixed Concrete Co., Ltd.; Kyuragi Concrete Industry Co., Ltd.; Tosa Sanko Ready Mixed Concrete Co., Ltd.; Nangoku Sanko Ready Mixed Concrete Co., Ltd.; Wakamatsu Sanko Ready Mixed Concrete Co., Ltd.; Tagawa Sanko Building-Block Co., Ltd.; Yamaga Ready Mixed Concrete Co., Ltd.; Mitsui Miike Engineering Corporation; Mitsui Miike Engineering Company Limited; Misui Miike Machinery Company Limited; Ariake Machinery Co., Ltd.; Sun Ariake Electric Co., Ltd.; Sanyo Machinery Co., Ltd.; Sanki Machinery Co., Ltd.; Kyushu Gas Supply Co., Ltd.; Hiroshima General Gas Supply Co., Ltd.; Mitsui Nishi-Nippon Wharf Co., Ltd.; Hibiki Coal Center Co., Ltd.; Kanda Harbour Transportation Co., Ltd.; Chiba Sanko Transportation Co., Ltd.; Sanko Transportation Co., Ltd.; Kita-Nippon Kouhatsu Co., Ltd.; Mitsui Muromachi Shipping Co., Ltd.; Hokkaido Coal Transportation Co., Ltd.; Miike Port Service Co., Ltd.; Sanko Motorcars Co., Ltd.; Miike Commerce Co., Ltd.; Sanko Commerce Co., Ltd.; Sanhoku Commerce Co., Ltd.; Sun Meridian Corporation; Munakata Commerce Co., Ltd.; Yamato Commerce Co., Ltd.; Akagi Commerce Co., Ltd.; Sanyo Commerce Co., Ltd.; Mita Commerce Co., Ltd.; Sanko Petroleum Co., Ltd.; Mitsui Mining Hong Kong Co., Ltd.; Kinki Sanko Co., Ltd.; Sanko Co., Ltd.; Chubu Co., Ltd.; Hokkaido Sanko Petroleum Co., Ltd.; Hiroshima Sanko Petroleum Co., Ltd.; Sanko Engineering Company Limited; Sanko Agency Co., Ltd.; Sanko-Ariake Housing Co., Ltd.; New Tagawa Real Estate Co., Ltd.; Seibu-Nippon Enterprise Co., Ltd.; Seibu Green Co., Ltd.; Mitsui Greenland Company Limited; Hokkaido Greenland Company Limited; Sanko Consultants Co., Ltd.; Sun Information & Service Corporation; Toyo Labor Consultant Co., Ltd.; Sun Lease & Development Co., Ltd.; Kita-Nippon Fresh Foods Co., Ltd.; S, M, S Co., Ltd.; N, M, S Co., Ltd.; Nishi-Nippon Fresh Foods Co., Ltd.; Mega Co., Ltd.; Arita Tile Co., Ltd.; Hokkaido Kyodo Lime Co., Ltd.; Mitsui-Tagawa Tile Co., Ltd.; Ajigawa Ready Mixed Concrete Co., Ltd.; Mitsui Cement Hume-Pipe Co., Ltd.; Hokuriku Sanko Ready Mixed Concrete Co., Ltd.; Nanwa Co., Ltd.; Murano Industries Co., Ltd.; Eiwa Ready Mixed Concrete Co., Ltd.; Sanko Ready Mixed Concrete Co., Ltd.; Kimi Ready Mixed Concrete Co., Ltd.; Tokyo Cement (LANKA) Co., Ltd..