Teck Rebranded, Revamped?Just a few thoughts on the massive transformation undergoing at Teck. In the past, where Teck was a HUGE conglomorate, very diversified miner, with its hands in almost every aspect of reousrce mining, now has been reduced to being solely a copper mining company? Good or bad thing for shareholers? Well, since there was two important "events" or divsititures the company has done in order to get to this point. one which i thought was smart & necessary and one which i'm on the sidelines & uncertain if it was a good move.......for the comany and it's holders.
If we take a look at these "strategic moves" more colsely, what are the true intents, objectives & motivations of mgmt for having implemented such moves? I think divestng itself & GTHO of the OIl Sands business was a VERY smart move on the part of mgmt. THry might have taken a HUGE loss or writeoff of those operations BUT i think it was the right thing to do for the long term survivability of the company. So well done on that particular move and i fully agree with mgmt on their decision.
On the other hand, i'm not too sure their second MAJOR divestiture, or their move to get out of the coal business was the right thing for s/h or the company. WHY? Because that was a very valuable & profitable operation they had with Elk, and it was metallurgical coal NOT the dreaded & hated thermal coal business which is the "supposed" bane of society. So i'm not really certain or too sure what their intentions were for selling that VERY profitable business. With the Oil Sands it was clear as day WHY they did it and didn't continue developing those assets, but with Elk i'm still not sure why they did it.
Selling the entirety of Elk to someone like Glencore, i'm fairly certain there had to be some very vlaied reason WHY mgmt did. I just don't see it right now, at least i don't, but i'm sure we'll find out soon WHY it was done. Because you just dont get rid of very valauble, extremely profitabile operations like that without a valid reason justifying it. I'm not a s/h here so i don't follow the comapny as closely as i do my other investments or as i did in the past. But i'm guessing or assuming their Elk assets are still profitable today as they were in gthe past. So was the profitability of Elk a concern or factor here, in their decsions to dispode of those assets or is there something else at play?
So now, after selling those two major assets, Teck is basically a copper miner, with some other base metals sprinkled about. Was this the intent of mgmt from the start of that strategic overhaul of company's operations? Who knows. But what i do know is that now Teck has made itself a tasty target for some of the MAJOR super miners like Rio, Vale, Barrick, Newmont & FNV. Its either that OR the company is now going solely as a copper entity and wishes to super size itself in that domain as well. Which one of those is the true intent of mgmt? Hard to tell at this point because the odds are fairly splt with both outcomes.
GLTA