Teck Resources Achieves Record Copper Production, Targets To Close Glencore Deal By Q3

Teck Resources Ltd TECK, Canada’s largest diversified miner, surpassed earnings estimates for the fourth quarter of 2023, propelled by robust steelmaking coal sales, record copper production and favorable copper prices.

"We had strong fourth quarter performance across our business, generating adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $1.7 billion in the quarter, returning cash to shareholders and advancing ramp-up of our Quebrada Blanca operations, resulting in Teck's record quarterly copper production," said President and CEO Jonathan Price, noting a positive development regarding germanium, a rare metal the firm produces in its Trail Operations facility in British Columbia.

“We have always been able to sell the production that we generate from that facility,” he said, clarifying pricing improved owing to Chinese restrictions.

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Higher copper prices, with a 2% increase in realized copper prices, contributed to Teck’s overall positive financial results.

Total copper output was 296,000 tons for the fourth quarter of 2023, up from 270,000 tons in the same period the previous year. Zinc production also witnessed a significant uptick, with zinc in concentrate reaching 182,000 tons, up from 143,000, and refined zinc production totaling 70,000 tons, up from 46,000.

Teck’s strategic priorities for 2024 include securing growth in its copper portfolio. The company plans to extend the life of its British Columbia HVC mine and initiate the permitting process for San Nicolas in Mexico. Despite the strong performance, Teck maintained its copper guidance for the year at 465,000 to 540,000 tons and zinc guidance at 565,000 to 630,000 tons.

The management noted progress with the planned separation of base metals and steelmaking coal businesses. The sale of the coal unit to Glencore PLC GLCNF, announced last year for $9 billion, is expected to close by the third quarter of 2024. The deal, subject to approval from the Canadian government, marked a strategic shift towards focusing on its copper business.

“The regulatory process is still going well, we are still confident of closing that transaction no later than the third quarter of 2024. So, all on track at this stage,” Price said.

Following the earnings results, Teck announced a dividend of $0.125, to be paid on March 28, to shareholders of record at the market close on March 15. In addition, Teck's board has authorized a stock buyback of up to $500 million.

These actions align with Teck's Capital Allocation Framework, which envisions a minimum of 30% of available cash flow for distributions to shareholders.

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