Teck sees $3bn in annual EBITDA if copper stays around current levels

Highland Valley Copper operations, British Columbia, Canada. (Image courtesy of Teck’s sustainability report 2022.)

Teck Resources Ltd expects to generate annual earnings before interest, depreciation, tax and amortization (EBITDA) of $3 billion if copper prices hit $5 per pound, CEO Jonathan Price said on Tuesday.

For Vancouver, Canada-based Teck, copper is the main driver of profitability after it sold its steel-making coal business to a consortium of buyers led by Swiss miner Glencore for $8.9 billion last year.

Price, speaking at the Bank of America Metals, Mining and Steels conference in Miami, gave a range of predictions for Teck’s annual EBITDA at different copper prices, the lowest being $2 billion if copper trades at $4 per pound.

US copper prices on the CME hit a record peak on Tuesday, with the Comex May contract hitting a high of $5.082 a lb, fueled by robust demand in the United States and fund buying.

The red metal has been in focus after mining giant BHP’s $37 billion offer to buy out rival Anglo American. Analysts have been nudging Teck to explore acquisition options because it is flush with cash from the sale of steel-making business.

But Price said Teck is focused on executing its existing projects when asked whether the company would acquire any copper assets.

“I know there’s a lot of discussion in the industry about buy versus build,” Price said.” And I think when people are looking at projects with capital intensities above $30,000 per ton, perhaps buying capacity makes more sense.”

Several industry estimates suggest the cost of building a new copper mine today is around $44,000 per tonne.

(By Divya Rajagopal; Editing by Jonathan Oatis and Leslie Adler)


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