Teck Spotlight – Latin America Set to Shine

Teck Resources (Teck) has emerged as a leading copper producer focused on growth. It started some years ago as it acquired and advanced base metal projects in both Peru and Chile. It now has one of the best copper pipelines out of any major producer.

The full picture of Teck’s future tranformation did not become clear until it started selling its steelmaking coal business, which was offloaded to Glencore for $7.3 billion in cash this last July. With the sale, Teck’s portfolio now mainly consists primarily of copper and zinc assets in North and Latin America.

The company then reorganized all of its assets into two regional business units.

• North American –  includes the Highland Valley copper mine in Southern British Columbia, Red Dog zinc mine in Alaska, and Trail zinc and critical metals refinery in B.C. In terms of copper, its growth plans include the Galore Creek and Schaft Creek projects in Northern B.C. and New Range copper-nickel project in Minnesota.
• Latin America – includes the Carmen de Andacollo and Quebrada Blanca copper mines in Chile and Teck’s interest in the Antamina copper mine in Peru. In terms of copper, its growth plans include the Zafranal, NuevaUnión, QB2 expansion, and the San Nicolas copper-zinc project in Mexico.

To understand why Teck is so attractive, you only need to look at its project pipeline with its Latin American operations being the star of the show.

Quebrada Blanca

• QB2 will double Teck’s copper production. With an initial mine life of 27 years producing 285,000 – 315,000 tonnes at full capacity.
• There is using only approximately 18% of the 2022 reserves and resource tonnage, the project has significant potential for future growth. The operation is targeted to achieve 285,000 – 315,000 tonnes of annual copper production in 2024 – 2026. 
• For 2024, QB2 helped increase Q2 production to 51,300t from 43,300t in the previous quarter. Teck is still eyeing 280,000t/y-310,000t/y over the next three years. Teck is drawing up an optimization plan to remedy bottlenecks.

Carmen de Andacollo

• This operation in Chile produces 39,500t of copper in concentrate last year. Production is expected to reach 38,000t-45,000t this year and 50,000t/y-60,000t/y in both 2025 and 2026.
• An operational continuity project to extend its useful life until 2031 is underway.  
• The asset is 90% owned by Teck and 10% by Enami.

NuevaUnión

• A 50:50 initiative with Newmont, NuevaUnión in Atacama region will combine the Relincho and El Morro projects, which are 40km apart. The plan is to have a conveyor to transport ore from the El Morro site to a single line mill and concentrator facility at the Relincho site. 
• By joining the projects, it is expected to provide Newmont and Teck with a number of key benefits, including reduced environmental footprint, an optimized mine plan, enhanced community benefits and greater returns over either standalone project.
• With total capex of $7.2 billion for NuevaUnión’s three phases and an estimated lifespan of 38 years, the mine is expected to have an annual production of 224,000 tonnes of copper, 269,000 ounces of gold and 1,700 tonnes of molybdenum, according to a pre-feasibility study from early 2018. 
• Teck is evaluating profitability and mine planning, although preliminary estimates indicate production of 224,000t/y of copper from 2034.

Zafranal

• Compañía Minera Zafranal (CMZ) is the owner the project. Teck has an 80% stake in CMZ while the remaining 20% is held by Mitsubishi Materials Corporation (MMC).
• Zafranal has an expected mine life of 19 years. The project’s original budget was USD$1.15bn but Teck has acknowledged that the cost will be most likely be over USD$2bn.
• Copper ore processing, including crushing, grinding, flotation, thickening and filtering, will be carried out in a concentrator plant with a processing capacity of up to 80,000 tonnes of ore throughput per day. The mine and concentrator are expected to produce an average of 133,000 tonnes of copper contained in concentrate during its first 5 years of production.
• The environmental certification service for sustainable investments, Senace, granted the license in May 2023, and detailed engineering is underway.

Antamina

• Teck owns 22.5% of this operation, along with BHP 33.75%, Glencore 33.75% and Mitsubishi 10%.
• The environmental impact study to extend mine life from 2028 to 2036 was approved this year. Among the main modifications are the expansion of the footprint of the open pit, and the expansion and optimisation of the dumps and tailings dam. 
• Teck’s attributable production is expected to be between 85,000t and 95,000t in 2024, 80,000t-90,000t in 2025 and 90,000t-100,000t in 2026.

San Nicolás

• San Nicolas is the result of a Teck-Agnico Eagle Mines alliance, in Mexico’s Zacatecas state.
• San Nicolas is a huge underground deposit of valuable minerals like copper, zinc, gold, and silver. It is expected to produce around 63,000t/y of copper and 147,000 t/y of zinc in the first five years, starting 2026.
• The USD$1.1b mine will have a useful life of 15 years. Currently environmental permitting is underway and a feasibility study advancing, with detailed engineering planned to start in the first half of 2025.

Conclusion

Since rebranding as Teck Resources in 2009, the company has focused on expanding its core operations and emphasizing sustainability. It has turned itself into one of the top copper and zinc producers in the world while making significant investments to limit its carbon emissions.

The company has also explored using technology to improve mine efficiency and sustainability, with investments in AI, automation, and digitization of its operations. These have led to improvements its mine optimization, processing, maintenance practices, and health & safety risks.

 During the last 15 years, Teck has a navigated volatile commodity prices, geopolitical challenges, and growing regulatory pressures related to climate change while maintaining its focus on long-term sustainability and innovation in the mining industry.

It is has now emerged as one of the industry’s most interesting companies with a huge portfolio of copper growth projects that span the Americas. All at a time when every other major mining company are trying to increase their exposure to copper in a very tight market where projects are difficult to develop from scratch and existing projects are expensive.

Ax Legal helps industrial technology, engineering, and service companies to navigate the legal and commercial aspects of operating their business in Latin America. With deep knowledge of the industrial and natural resource sectors, we provide actionable and practical advice to help streamline our clients’ entries into Latin America, improve how they operate in the region, and to protect their interests.

Over the years, our team of legal and commercial advisors have developed a track record of working with companies of all sizes from Australia, Canada, the U.S., and Europe. The one common factor that connects our clients is that they are leaders in their field, providing innovative technologies and services to the industrial sectors.

To better understand how we can support you in the Region, please contact Cody Mcfarlane at cmm@ax.legal