CGIC Pressures Nittetsu to Sell Assets, Boost Buybacks to Spur Shareholder Value

Investor Continental General Insurance Co. (CGIC) has demanded that Japanese mining firm Nittetsu Mining Co. take immediate action to address what it describes as years of mismanagement and inefficiency. In a letter dated December 4, CGIC called on the company to sell off non-core assets and use the proceeds to fund a significant share buyback program. The firm also wants Nittetsu to commit to cost-cutting measures and allocate at least 50% of its net income toward repurchasing shares.

The letter from CGIC Executive Chairman Michael Gorzynski warned that if Nittetsu does not respond to these demands, the investor may seek to replace members of the company's board. Gorzynski, who previously worked with activist investor Third Point, emphasized that CGIC has repeatedly raised concerns about Nittetsu's performance and has been met with "persistently slow and lethargic" responses.

A representative for Nittetsu did not immediately respond to a request for comment. The firm, which operates limestone mines in Japan and the Atacama Copper Mine in Chile, has seen its shares more than double this year, giving it a market value of about ¥159 billion ($1 billion).

CGIC's stake in Nittetsu, now at 10%, positions it as one of the company's largest shareholders, on par with Nippon Steel Corp., which owns just over 10.2% of the firm.

Why the Standoff Happened

CGIC's letter outlined a series of criticisms, including allegations of overcapitalization, bloated holdings, and a failure to accelerate share buybacks. Gorzynski argued that the company's sluggish response to shareholder concerns has left long-suffering investors with little to no return on their capital. "The company's responses have been persistently slow and lethargic, something long-suffering shareholders can ill afford to continue," he said in the letter.

CGIC has been a long-term advocate for aggressive buybacks, a strategy that has proven successful for other firms in the sector. The firm's proposal aligns with broader trends in shareholder value creation, particularly in mining and natural resources, where buybacks are often used to offset underperformance and reward investors.

How Markets Reacted

Nittetsu's recent performance has been mixed, with its shares rising sharply in 2025 despite ongoing operational and governance concerns. However, the company has yet to make any public commitments to large-scale share repurchases or asset sales. The lack of clarity on its capital allocation strategy has drawn criticism from institutional investors, particularly those focused on long-term value creation.

CGIC's actions are not isolated. Across global markets, several firms have recently announced or expanded their buyback programs. Hyperliquid Strategies, for example, announced a $30 million share repurchase plan, while nCino unveiled a $100 million initiative aimed at returning value to shareholders. These moves reflect a broader trend of companies using buybacks to stabilize share prices and improve investor sentiment.

What This Means for Investors

For Nittetsu shareholders, the CGIC letter raises the stakes in what has become a high-profile shareholder campaign. The firm's largest shareholders, including Nippon Steel, will now be closely watching how management responds to these demands. If CGIC follows through on its threat to push for board changes, it could trigger a larger shareholder-driven shake-up at the company.

Investors are also likely to monitor Nittetsu's upcoming joint venture developments in Peru and Chile. Nittetsu recently completed its final $1.5 million payment to Camino Minerals under an earn-in agreement, formalizing a joint venture over the Los Chapitos copper project. These developments could provide a potential source of capital to fund buybacks if the company commits to doing so.

Risks to the Outlook

One key risk is that Nittetsu could resist CGIC's demands and instead pursue alternative strategies to improve shareholder value. For example, the firm could prioritize organic growth in its existing mining operations or explore strategic acquisitions in the copper or lithium space. However, CGIC argues that such strategies have not delivered meaningful results in recent years.

Another risk is the broader economic environment. With global mining markets facing volatility due to shifting demand for commodities and geopolitical tensions, Nittetsu may struggle to maintain its current market valuation without a clear and aggressive capital return strategy.