Teck's Highland Valley copper mine near Logan Lake, B.C., contributed to the company's strong quarter for copper production.DARRYL DYCK/The Canadian Press
Record-high copper prices propelled Teck Resources Ltd. TECK-B-T past profit expectations in the second quarter, as it awaits a decision from China on its proposed acquisition by Britain’s Anglo American PLC NGLOY.
Vancouver-based Teck on Thursday reported a 25-per-cent jump in year-over-year copper production to around 136,000 tonnes, with Highland Valley Copper in British Columbia performing particularly well. Quebrada Blanca in Chile, Teck’s biggest copper mine, also delivered solid results with production rising by 6 per cent to 55,800 tonnes.
Copper, which is used in electronics, wiring, transportation and plumbing, surged by 40 per cent year-over-year to an average of US$6.05 a pound in Q2. The commodity on Thursday traded around US$6.30 a pound, not far from its all-time high of US$6.67 a pound in June, according to data from Trading Economics.
Teck sold its legacy coal business to Glencore PLC in 2024, broadening its exposure considerably to copper.
Editorial Board: Ottawa shouldn’t stake a direct claim on critical minerals
Last September, Teck agreed to be acquired by Anglo American. The British miner said on Thursday that the deal remains on track to close between September and March of next year. After obtaining approval from both Teck and Anglo shareholders last year, the Canadian federal government also gave the deal the nod in December.
One of the final regulatory hurdles to clear before the deal can close is obtaining antitrust approval from China. The State Administration for Market Regulation in China is scrutinizing what impact Anglo Teck could have on the country’s copper market, whether too much power might be concentrated in one entity, and how that might affect China as a major buyer of the commodity.
In a conference call with analysts on Thursday, Teck chief executive officer Jonathan Price said that SAMR’s probe of the transaction is progressing in a normal fashion, and the company is responding to various requests as part of that process. One analyst asked whether the regulator had asked for any asset sales as a condition for approving the deal.
“We haven’t received any requests for remedies arising from the approval process,” Mr. Price replied.
“So business as usual for the time being.”
London-based Anglo intends to move its global headquarters to Canada once the deal is consummated and rename itself Anglo Teck.
If Anglo succeeds in buying the Canadian mining company, it stands to benefit from a major investment by Ottawa into one of Teck’s legacy operations.
Teck Resources' zinc and lead smelting and refining complex in Trail, B.C., in 2012. Ottawa recently announced it intends to invest up to $400-million in the smelter.DARRYL DYCK/The Canadian Press
Earlier this month, the federal government said it intends to invest up to $400-million into Teck’s Trail smelter in B.C., as part of its multibillion-dollar drive to bolster North American supplies of critical minerals.
Separately, Anglo American, as part of its legally binding commitments to Ottawa last year, said it intends to invest up to $850-million into Trail.
The dual investments could double Trail’s existing production of germanium and antimony and potentially add new gallium production.
Gallium is used in semiconductors and radar systems. Antimony’s applications include flame retardants and high-efficiency batteries. Germanium is used in fibre optics and in military applications, such as infrared optical vision.
The Trail facility, which employs more than 1,400 people, has been in continuous operation for 130 years. Teck took over the operation in 2001 when it acquired Cominco.
Teck reported a profit of $884-million for the quarter ending on June 30. The miner’s adjusted earnings per share was $1.93, blasting past the $1.41 per share that was forecast by S&P Capital IQ.
“Both companies appear to be heading into their planned merger firing on all cylinders in their core businesses,” Christopher LaFemina, analyst with Jefferies wrote in a note to clients on Thursday, referring to both Teck and Anglo.
Shares in Teck rose by 4.4 per cent in trading on The Toronto Stock Exchange on Thursday to close at $84.18 apiece.