Teck Resources saw its copper production increase in the first quarter from a year earlier as its Quebrada Blanca expansion project accelerated toward full production.
The approximately US$8.7 billion project in Chile is at the heart of the Vancouver mining company’s efforts to focus on metals critical to the energy transition.
The company completed all major construction on the project during the quarter, including a molybdenum plant and ship loader that allowed it to begin shipping mining concentrate, Chief Executive Officer Jonathan Price told investors Thursday during a conference call to discuss the company’s latest results.
“It was a magnificent sight,” said Mr Price, who was there to see the second cargo being loaded onto a ship.
Mr. Price made the comments on Thursday amid news that BHP Group had made a takeover offer worth around US$39 billion for Anglo American.
BHP said one of the main reasons for the attempted acquisition was to increase its exposure to “forward-looking” commodities through Anglo’s copper assets, a move Mr Price said validates Teck’s own strategy.
“BHP’s proposed or potential takeover of Anglo only reinforces the long-term fundamental appeal of copper markets. And, you know, the long-term fundamentals around which we have centered our strategy for the years to come. »
Copper is expected to be in high demand as part of the energy transition, as the material is essential for multiple things, from electric vehicles to wind turbines to the electricity grid to connect them.
“It’s an exciting time in the copper market,” Price said, as copper prices recently surged above US$4.40 per pound, compared to an average of $3.83. US in the first quarter.
“The world is quickly moving from debating whether demand for copper will increase significantly, to where and how we will find more of it. »
Royal Bank analyst Sam Crittenden noted that Teck was still working to streamline its operations and that a slower ramp-up had led to copper production of 43,000 tonnes at QB, about 12% less than the analyst expectations.
Still, total copper production increased 74% to 99,000 tonnes from the first quarter of last year, thanks to both the ramp-up of Quebrada Blanca and the strong performance of its mine. Antamina, the company said.
Although copper production at the Chilean mine was tempered in the first quarter, the company maintained its full-year copper concentrate production guidance of 230,000 to 275,000 tonnes and also maintained its cost forecasts unchanged.
The company also kept unchanged its latest investment cost forecast, which was closely watched by analysts since the initial estimate for the Quebrada Blanca expansion project was around US$4.7 billion.
Teck is working to increase its copper production as it moves away from its steelmaking coal business, which is the subject of a proposed acquisition by Glencore. The company received US$1.3 billion in cash from Nippon Steel during the quarter for a minority stake in the business, while regulators are still reviewing Glencore’s portion of the deal for the majority of the business.
The company’s steelmaking coal business was hit by the freeze in January that led to equipment breakdowns that contributed to a drop in sales, while its zinc business suffered from low prices for much of from last year.
The mining company says it made profit attributable to shareholders of 343 million, or 65 cents per diluted share, for the quarter ended March 31. The result compares to a profit of 1.14 billion, or $2.18 per diluted share, during the same quarter last year.
Revenue totaled 3.99 billion, up from 3.79 billion in the first quarter of 2023.
On an adjusted basis, Teck says it earned 75 cents per share from continuing operations, down from $1.78 per diluted share a year earlier.
reference: www.lapresse.ca