Japanese materials firm Nittetsu Mining faces mounting pressure from shareholder CGIC, which has called for a share buyback, citing mismanagement and underperformance. The move underscores growing investor concerns over corporate governance at the listed miner.
- CGIC is demanding a share buyback from Nittetsu Mining (9108.T) due to perceived mismanagement.
- Nittetsu Mining's ROE was 4.3% in FY2025, well below the sector average of 11.7%.
- The company holds over ¥80 billion in cash but has not repurchased shares in five years.
- The stock declined 12% over the past year despite favorable iron ore market conditions.
- A buyback of ¥30 billion could signal strategic change and boost investor confidence.
- CGIC may escalate activism if management ignores the demand, affecting governance stability.
Investor CGIC has formally demanded that Nittetsu Mining Co., Ltd. (9108.T) initiate a share buyback program, criticizing the company's strategic direction and capital allocation. The appeal, directed at the company’s board, comes amid declining investor confidence and a persistent underperformance relative to peers in the industrial and materials sectors. CGIC specifically labeled the company's management as 'mismanaged,' arguing that sustained low returns on equity and stagnant share prices reflect poor oversight. The call follows a year in which Nittetsu Mining's stock, trading under the ticker 9108.T on the Tokyo Stock Exchange, declined by over 12% despite modest gains in global iron ore prices. The company’s return on equity (ROE) stood at just 4.3% in the fiscal year ending March 2025, far below the sector average of 11.7% for Japanese mining firms. Meanwhile, the company has not repurchased shares in the past five years, maintaining a zero buyback policy despite accumulating cash reserves exceeding ¥80 billion. The pressure from CGIC could prompt a strategic shift in Nittetsu’s capital structure. A buyback, even of modest scale—say, ¥30 billion—could signal a renewed commitment to shareholder value and potentially trigger a rally in 9108.T. The move may also influence other institutional investors, particularly those focused on governance and capital efficiency. Market participants are watching closely, given that Nittetsu Mining is a key player in Japan’s domestic iron ore supply chain and is listed under the ticker NIT.MT on the Tokyo Market. If implemented, a buyback would mark a departure from the company’s historical stance, which emphasized reinvestment and debt reduction. However, in the absence of a response, CGIC may escalate its activism with public statements or proxy voting actions, further destabilizing investor sentiment.