Name of the Project
Quebrada Blanca Phase 2 (QB2) copper project.

Location
Tarapacá region, northern Chile.

Project Owner/s
On March 29, 2019, Teck Resources concluded a transaction where SMM/SC subscribed to a 30% indirect interest in QBSA, which owns the QB2 copper development. SMM/SC contributed $966-billion to QBSA on closing the transaction and a further $336-million over the remainder of 2019, including $38-million for interest on the loan advances during 2019.

In the fourth quarter of 2019, Teck closed the $2.5-billion limited recourse project financing to fund the development of QB2.

Project Description
QB2 is one of the world’s biggest undeveloped copper resources.

The supergene orebody, a near-surface deposit, was mined during the initial phase of Quebrada Blanca. QB2 will develop the deeper sulphide resource underlying the existing operation. 

QB2 is expected to produce 316 400 t/y of copper equivalent for the first five years of mine life. The project is expected to have an initial 28-year mine life.

It is also expected to include the construction of a 140 000 t/d concentrator, tailings storage facility, concentrate pipeline, water supply pipeline, desalination plant, concentrate filtration plant and port to produce copper and molybdenum concentrates.

The project will include the first large-scale use of desalinated seawater at a mining operation, in the Tarapacá region of Chile, instead of freshwater use. In addition, port facilities for loading mineral concentrate onto ships for transport to markets will be built.

Potential Job Creation
About 15 000 people are working on the QB2 project, with 2 000 ongoing direct and indirect jobs during operation.

Net Present Value/Internal Rate of Return
Not stated.

Capital Expenditure
QB2 will cost $8.6-billion to $8.8-billion to complete, from an earlier estimate of $8-billion to $8.2-billion.

QB2’s cost estimates have risen steadily since early 2019, when the project was expected to cost $4.7-billion. The mine has faced disruptions relating to the Covid-19 pandemic and logistical challenges exacerbated by Russia’s war in Ukraine.

Planned Start/End Date
QB2 will start up in the second half of 2022, doubling Teck’s consolidated copper production by 2023.

Latest Developments
Rising costs to build Teck Resources’ QB2 project have shown how the mining industry is struggling to expand supply on budget and on time amid a looming shortage globally of copper.

The QB2 expansion is expected to cost an additional $600-million from the previous estimate because of construction delays. QB2 will now cost $8.6-billion to $8.8-billion to complete.

The company also reported in a statement on October 25 that it had withdrawn its environmental permit application for the project’s mill expansion after regulators recommended against approving the plan. Submitting a revised application will add 12 months to the overall regulatory process, Teck said.

The company faces even more pressure to deliver on its promises after spending much of this year fighting off an unsolicited approach from Swiss commodities giant Glencore, which wanted to acquire QB2 before switching its focus to Teck’s coal business.

QB2 is aiming to complete its ramp-up this year after producing first concentrate in March.

Key Contracts and Suppliers
None stated.

Contact Details for Project Information
Teck Resources public relations manager Chris Stannell, tel +1604699 4368 or email Chris.Stannell@teck.com.
Teck Resources investor relations, tel +1604699 4257 or email investors@teck.com.