Teck Resources (TSX: TECK.B; NYSE: TECK) reported a more than fivefold increase in third-quarter profit as record copper prices and stronger production boosted earnings ahead of its planned $54-billion merger with Anglo American (LON: AAL).
The Canadian miner earned $1.59 billion, or $3.24 per diluted share, in the quarter ended Sept. 30, compared with $281 million, or 57¢ per share, a year earlier. Adjusted earnings rose to $1.88 per share from 76¢, while revenue climbed 33% to $4.52 billion.
“These results further demonstrate the strong foundation from which we are advancing toward completion of the planned merger with Anglo American,” CEO Jonathan Price said.
The results strengthen Teck’s financial position as it prepares to combine with Anglo American in a deal that would create a major global copper producer. However, a strike at Canada’s largest copper mine and outstanding Chinese regulatory approval present challenges as the companies work toward completing the transaction.
Copper performance
Teck’s copper division generated $1.6 billion in earnings before interest, taxes, depreciation and amortization (EBITDA), more than double the $740 million recorded a year earlier. Copper prices averaged a record $6.40 per lb during the quarter.
Copper production increased 11% to 115,700 tonnes, with gains across all operations except Carmen de Andacollo in central Chile, where extreme weather disrupted output. Despite severe conditions, the company’s Quebrada Blanca mine in northern Chile produced 47,200 tonnes.
Stronger cost controls and lower smelting and processing charges helped reduce copper net cash unit costs to $1.77 per lb from $2 a year earlier.
Teck generated $1.6 billion in operating cash flow from its mining operations and increased its cash holdings by $655 million during the quarter. It ended September with $6.7 billion in cash and total liquidity of $10.9 billion.
The improved performance comes as Teck faces a labour dispute at its Highland Valley Copper mine in British Columbia, where about 1,200 workers represented by the United Steelworkers began a strike over the weekend.
The operation, Canada’s largest copper mine, recently secured approval for an extension that would keep it operating until 2046.
Teck said the mine continues to operate at reduced capacity, although the effect on production will depend on how long the strike lasts.
Merger outlook
Teck and Anglo American continue to seek regulatory approvals for their proposed combination, announced in 2025, with both companies expecting to complete the transaction by March 2027.
China remains the only country where the companies operate that has yet to approve the deal. Its antitrust regulator has reportedly sought commitments from Anglo American to maintain steady copper concentrate supplies to the country as a condition of approval.
The companies are advancing integration planning while prioritizing operational safety, reliability and business continuity.
Teck expects the merger to generate about $800 million in annual pre-tax synergies, with roughly 80% achieved on a run-rate basis by the end of the second year following completion.
The proposed combination also offers an opportunity to coordinate development of the neighbouring Collahuasi and Quebrada Blanca copper operations in Chile.
Price said closer integration of the two assets could generate about $1.4 billion in additional annual underlying EBITDA between 2030 and 2049.
He described the strategy as a lower-risk, less capital-intensive route to substantial copper production growth than developing the operations independently.
Source: https://www.mining.com/teck-profit-surges-as-copper-prices-hit-record-highs/
