RE: Special dividendI highly doubt there would be any special dividend and even if there was it would come out of shareholder equity so my attitude is so what. Teck has too many good things to do with their money. They have the oil sands capital cost and they need uranium & possibly more nickel. Cheers!!!
Teck awaits the bill on Fort Hills
ANDY HOFFMAN
00:00 EST Friday, Dec 01, 2006
Teck Cominco Ltd. signaled yesterday it may be on the hook for up to $3-billion to fund development of the Fort Hills oils sands project in Alberta, a huge cost that will preclude the cash-rich miner from major acquisitions or special dividends in the short term.
Vancouver-based Teck is sitting on $3.8-billion in cash thanks to soaring zinc and strong copper prices. But it won't be able make any large spending decisions until it learns how much it will have to put toward the oil sands property.
"The biggest uncertainty we have to deal with is the magnitude of our commitment to Fort Hills," Mike Agg, Teck's vice-president of refining and metal sales, told an investor conference in New York.
"Until we know this, we cannot make any major commitments regarding capital allocation," he said.
Teck, a metals miner with major interests in zinc and coal, owns a 15-per-cent stake in Fort Hills. The project operator and lead partner, Petro-Canada, which owns 55 per cent, is expected to deliver a report outlining Fort Hills' size and expected capital costs in the first half of next year.
Petrocan recently presented a general cost range for Fort Hills of between $13-billion and $19-billion, based on announcements made by competitors on other oil sands projects. In October, it pushed back the decision date on whether to proceed with the project from this year to 2007.
A shortage of construction workers and steel in the Fort McMurray area have delayed other oil sands projects and increased costs.
Teck joined the Fort Hills project in 2005, investing $475-million up front and committing to fund 15 per cent of the project's capital costs. The move was part of a strategy to diversify the Vancouver company's assets away from exchange traded commodities.
An extended boom in commodity prices has triggered a wave of mergers and acquisition activity in the mining sector.
This summer, Teck lost the battle for nickel miner Inco Ltd. in a fevered bidding war with Brazil's Companhia Vale do Rio Doce (CVRD) and Arizona's Phelps Dodge Corp.
Mr. Agg said Teck will record $430-million in proceeds from the sale of Inco securities in the fourth quarter but won't be able to return much of the cash to shareholders or do a large deal with another miner until it knows how much Fort Hills will cost.
"They do have a lot of cash. People have been expecting them to do another large deal, but there may not be another big deal to do," said Kerry Smith, an analyst with Haywood Securities.
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