Teck Seeks Copper-Mining Acquisition Amid Price Slump
This should freshen it up. Wrong article.
byLiezel Hill
March 4, 2015(Bloomberg) -- Teck Resources Ltd., Canada’s second-largest mining company, is looking to buy a copper mine as the current slump in prices puts pressure on some rivals to sell.
Teck, which also produces steelmaking coal and zinc, is interested in locations with low political risk, Chief Executive Officer Don Lindsay said Tuesday in an interview in Toronto. He declined to comment on specific assets.
“There are a couple of things that we think might shake loose,” Lindsay said. “We’re looking more towards the end of the year.”
Copper fell to a five-year low in January amid a global supply glut. While it has since rebounded, the metal is still down 17 percent from a year ago. The longer the price stays at about $2.60 a pound -- close to current levels -- the more the likelihood that some producers will be forced to sell mines, according to the Teck boss.
Despite current weak prices, Vancouver-based Teck sees a significant production deficit emerging by 2017, with copper prices eventually rising to more than $3. Demand is “pretty solid,” while regulatory concerns and other hurdles make it difficult to build new mines, Lindsay said.
“We know how tough it is,” he said. “We have a lot of faith that the copper market’s going into deficit and that it’s going to be a very high return period for several years.”
Teck’s last major acquisition was in 2012, when it bought oil-sands company SilverBirch Energy Corp. for C$517 million ($416 million).
Lindsay, 56, a former investment banker who’s been CEO since 2005, said Teck has evaluated copper assets in the last few years. He said he has no regrets about not buying any of them because Teck is determined not to overpay, something that still holds as the company looks once more at opportunities.
“There are competitors out there who are prepared to pay quite significant prices, probably using a $3.50 or $3.75 copper price to justify their bid,” he said.
Teck dropped 4.4 percent to C$18.66 in Toronto. The shares are up 18 percent this year.