JOHANNESBURG – Teck Resources will seek a partner for its huge Chilean copper project ahead of a final decision on moving forward with construction.
CEO Don Lindsay has called the Quebrada Blanca Phase 2 expansion project in northern Chile Teck’s most significant growth opportunity, saying it has the potential to double the company’s copper business.
The Canadian miner may announce a deal in the fourth quarter for a minority interest in the project and would probably make a development decision around the same time, Teck said in its second-quarter earnings statement Thursday.
The world’s biggest miners are becoming increasingly bullish on copper and looking to add exposure to the metal, which is expected to see growing demand as cities expand and electric-vehicle use rises. Anglo American on Thursday approved construction of the $5-billion Quellaveco project in Peru, which it owns with Mitsubishi Corp.
Teck owns 90% of the QB2 project, with a Chilean state agency holding the balance, and said it wants to ultimately hold between 60% and 70%. The company said in 2016 that it was targeting a project cost of $4.5-billion to $5-billion for QB2, which will have an initial lifespan of 25 years and produce about 300 000 metric tons of copper annually in the first five years.
“A decision to proceed with development will be contingent upon regulatory approvals and market conditions, among other considerations, and we are currently exploring various potential financing alternatives for the project,” Teck said Thursday.
On Wednesday, the company announced that Norman B. Keevil, who helped build the company into Canada’s largest diversified miner, is stepping down as chairman and will be succeeded by McKinsey & Co.’s Dominic Barton.