Teck Second-Quarter Earnings Triple as Copper Prices Advance

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(Bloomberg) — Canadian miner Teck Resources Ltd. reported a tripling of second-quarter earnings on higher copper prices, while reaffirming output guidance, including at its flagship Quebrada Blanca mine in Chile.

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Adjusted earnings before interest, taxes, depreciation, and amortization rose to C$2.19 billion ($1.6 billion) in the three months through June, up from C$722 million in the prior-year period, the company said in a statement. Revenue rose 78% year on year to C$3.61 billion as average copper prices on the London Metals Exchange jumped about 40%.

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Shares of Teck jumped as much as 5.2% as markets opened in Toronto on Thursday, bucking a broader downturn in equity markets amid concerns about an escalation in the US-Iran conflict. 

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Copper production at the Quebrada Blanca mine in Chile was 55,800 tons, slightly higher than both the first quarter and same period last year, the Vancouver-based company said. 

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Copper units costs dropped in the second quarter as stronger sales volumes and byproducts including silver and molybdenum helped offset inflationary pressures stemming from the war in the Middle East. Copper output guidance for Quebrada Blanca, known as QB, remains unchanged at 200,000 to 235,000 tons this year.

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The company has made progress over the last three quarters in stabilizing performance at the mine, following a series of operational setbacks and missed output targets after ramping up production in 2023. Teck said it expects the slightly lower grades at the mine in the second half of the year to be offset by increasing throughput.

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The turnaround remains a key priority for the company and its investors, with the asset central to a planned tie-up between Anglo American Plc and Teck. Under the proposal, QB would be integrated with Anglo’s nearby Collahuasi operation to create a larger mining complex expected to produce an additional 175,000 metric tons of copper a year from 2030 through 2049.

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“Following another quarter of stable QB execution, we believe the market will increasingly focus on Teck’s earnings power rather than its ramp-up risk,” Jefferies analysts led by Christopher LaFemina wrote in a note to clients. Given Anglo also reported a strong second-quarter earnings result on Thursday, “we see a clear path to the combined Anglo-Teck being a go-to copper major over the next 12 months,” he added.

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The merger with Anglo, announced in September, remains subject to regulatory approvals. Canada, Chile, Japan and several other jurisdictions have cleared the transaction, leaving China as the key outstanding approval. Teck reiterated Thursday that it expects the deal to close within 12 to 18 months of its original announcement.

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The company added that operations at Carmen de Andacollo, also in Chile, have been partially suspended due to severe weather conditions including extreme rains and closure of roads since July 17. 

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“The resumption of normal operations will be evaluated as weather conditions improve and water levels recede,” the company said, adding that there have been no changes to its output guidance, and no impact to QB.

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