Teck setbacks in Chile underscore copper supply struggles

Teck Resources Ltd. lowered production guidance for its flagship Chilean mine in the latest setback to the Canadian company’s efforts to join the copper big leagues.

The sprawling Quebrada Blanca open-pit operation in the high Andes is grappling with tailings storage issues, which is requiring additional spending and restricting production, Teck said in an earnings statement and call Thursday.

The tailings hitches follow plant and geotechnical setbacks that have disrupted Quebrada Blanca’s ramp-up after a major overhaul that came in $4 billion over budget and years behind schedule. The struggles at an operation dubbed QB2 show how the mining industry is battling to expand supply when the world faces a looming shortage of the key metal.

QB2 is set to double Teck’s copper output and is a key part of its push to become a major standalone metals producer after exiting coal. A successful ramp-up is critical to the Teck investment case, said Jefferies analysts Christopher LaFemina and Patricia Hove.

“The market is unlikely to give Teck credit for this ramp-up of production until it is actually achieved as there is some question as to whether there are structural issues with the asset,” the analysts wrote in a Thursday note to clients.

Quebrada Blanca, which was expected to churn out 230,000-270,000 metric tons this year, is now seen producing in the 210,000-230,000 range, Teck said in a statement.

To be sure, Teck expects the mine to resolve the tailings issues soon, maintaining its 2026 production guidance. But seperately, the mine continues repairs on a ship loader, work that it now expects to extend into the first half of next year, albeit without an impact to output.

The Canadian miner, which owns an indirect 60% interest in Quebrada Blanca, is exploring potential synergies with the nearby Collahuasi mine, in which Anglo American Plc and Glencore Plc each have a 44% stake.

(By James Attwood)