Teck Resources is saying goodbye to coal after closing a deal to sell its minority stake in Japan's Nippon Steel Corp.'s steel coal operations. and South Korean steel company Posco. Nippon Steel now owns a 20% stake in Teck's coal business, known as Elk Valley Resources. In exchange, the Japanese firm gave up its previous 2.5% stake in one of Teck's coal operations and paid $1.7 billion in cash. Posco swapped its stake in Teck's two coal businesses for a 3% stake in the entire steel coal business.
The deals are part of an umbrella deal signed with Glencore (LON: GLEN) in November 2023 under which the Swiss miner and commodities the trader will pay $6.9 billion for 77% of Elk Valley Resources.
The agreement with Glencore, which limited negotiations and takeover attempts initiated by the Baar-based firm, remains subject to regulatory review and is expected to , will close in the third quarter of 2024.
Less copper
Canada's largest diversified miner also said 2023 production at its flagship Chile copper mine Quebrada Blanca (QB) was lower than expected.
Teck forecast copper production of 80,000 tons for 2023 due to reliability and stability issues at the plant in the fourth quarter. But QB's output, excluding copper cathode, was only 56,200 tonnes for the year.
“In the second half of 2023, all QB operations, including mining, crushing, grinding, flotation, tailings, desalination and concentrate handling , were operating at or above design capacity,” Tech said in a statement.
“In the fourth quarter, we focused on delivering reliable and stable operations. "This took longer than expected and as a result, production fell short of forecast," the company said.
In October, the Vancouver-based miner raised the cost of its QB expansion project, known as QB2, by at least a third times since the start of its construction. The project is expected to cost $8.6 billion to $8.8 billion to complete.
QB2, Teck's key growth project, has faced rising costs and several delays. Production was originally expected to begin in 2021, but first copper was produced by the end of March last year.
At full capacity, QB2 plans to double Teck's copper production on a consolidated basis. The initial mine expansion period will be 27 years, using only approximately 18% of reserves and resource tonnage as of 2022, with significant future growth potential.
QB2 is projected to reach 285,000–315,000 tonnes of annual copper production in 2024–2026, becoming the second largest copper mine in Chile after Escondida.
Teck owns a 60% stake Teck Quebrada Blanca SA (QBSA), which owns the mine. Japanese companies Sumitomo Metal Mining and Sumitomo Corporation have a collective stake of 30% in QBSA, and Chilean state-owned company Enami has a 10% non-financial stake in the project.
