Jonathan Price: A once-in-a-generation opportunity for Canada and Teck shareholders

Teck Rescources CEO Jonathan Price will become deputy chief executive of a merged Anglo Teck. Photo by Christopher Katsarov Luna /Bloomberg

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By Jonathan Price 

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In business, there are moments that define a generation; decisions that affect the future of a company, but also an entire industry and a country. The merger of equals between Teck Resources Ltd. and Anglo American PLC is one of those moments.

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This is not just a transaction; it is a once-in-a-generation opportunity to forge a new global critical minerals champion, headquartered and based right here in Canada. By combining our two mining companies, we will form the world’s fifth-largest copper producer and the second-largest copper-focused stock globally.

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For Canada, it brings unprecedented economic and strategic benefits and a renewed strength and profile on the global critical minerals stage. For Teck shareholders, this merger delivers billions in value, long-term upside potential and ownership of what will be the world’s premier copper mining stock.

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Let me be clear: this is a merger of equals, structured to take advantage of the complementary portfolios and strengths of each company to create something even greater than the sum of its parts. The benefit to shareholders is enormous: a value proposition that fully recognizes Teck’s incredible assets and potential.

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That value is primarily made up of four components. One, an uplift of US$1.4 billion per year of EBITDA, on a 100 per cent basis, through combining the adjacent Collahuasi and Quebrada Blanca mines in Chile to create one of the world’s largest copper complexes, increasing production by about 175,000 tonnes annually, with relatively little capital required.

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Two, an estimated US$800 million in ongoing annual synergies by combining the companies and by leveraging scale in marketing, trading and procurement.

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Three: incremental value from non-core asset sales as Anglo American continues to simplify its portfolio; Teck shareholders will benefit from the proceeds of those divestments further strengthening the Anglo Teck balance sheet.

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And four, because this is an all-stock merger of equals, our shareholders maintain exposure to what will be the highest-quality, go-to copper-focused stock anywhere in the world.

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Copper is the backbone of electrification, artificial intelligence and the low-carbon transition, and demand is set to soar. This new company will be uniquely positioned to meet that demand, with a portfolio of multi-generational operations and growth projects spanning the Americas and beyond.

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Recent challenges with the pace of ramp-up of our QB mine are well understood, and we are taking actions now to address those challenges in the near term. As we do — and the cash generation of that operation is strengthened — our shareholders will share in that value as well.

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While the work at QB is underway, we can’t afford to stand still. It takes a rare convergence of timing, strategy and market conditions to create an opportunity of the magnitude of this transaction. By acting decisively to achieve the merger of Teck and Anglo American, we can secure and accelerate the realization of the upside of this merger, both for our shareholders and Canada.