Teck Resources Bets on Copper to Boost Growth
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Teck Resources Bets on Copper to Boost Growth

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Fernando Mares By Fernando Mares | Journalist & Industry Analyst - Tue, 12/13/2022 - 16:24

The Canada-based Teck Resources aims to harness the potential benefits of copper leveraging by using resources obtained from its coal mining projects. Experts expect that copper demand will grow in the long term owing to the energy transition, making the resource a great future investment.

During his first interview with the media after taking over as Teck Resources’ CEO, Jonathan Price said that the company will focus on its copper operations, which will be boosted by the good results of its coal projects. With this move, the company aims to become a more significant player in the copper industry, as Price believes this niche will grow exponentially owing to the clean energy transition. “We are so focused on copper just because of the critical role that the metal is going to play in decarbonization through electrification. It is really the cornerstone of what we are doing,” Price said to Bloomberg News.

By betting on coal, Teck Resources would be shifting its business model, which has been coal-focused for over a decade because the fuel has been the company’s largest revenue generator. Currently, the copper business represents less than a fifth of the company’s revenue while metallurgical coal represents almost half of it. However, Price stressed that this does not mean the company will completely abandon coal production. Rather, it will be using the cash flow it generates to boost the copper branch. 

According to Price, the copper market will be in balance next year. However, in the middle and long term, copper demand will surpass the available offer, a scenario that will be “constructive” for prices. Copper also boosts the company’s commitment to sustainability as copper is an essential metal for the green energy transition, unlike polluting coal. 

Price said that Teck Resources has no plans to expand its g coal business. However, he highlighted the importance of coal to the energy transition and said that there is no contradiction between aiming to be a greener company and still extracting coal. “Copper is of course key to electrification, but steel is going to be vitally important to build out infrastructure. To continue to produce that steel, we are going to continue to need steelmaking coal, and this is entirely consistent with the desire to produce materials that the world needs to decarbonize,” Price said. 

Currently, Teck Resources has copper projects to be developed in Chile, Peru, Canada, the US and Mexico. The company is looking to finish the second phase of its Quebrada Blanca mine in Chile, which the company expects will double its copper output. In Mexico, the company joined efforts with Agnico Eagle to develop the San Nicolas project with an estimated CAPEX of US$842 million, aiming to produce over 65,800t/y of copper and start production by 2026, as reported by MBN.
 

Photo by:   Omid Roshan

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