Teck’s mining breakup sets the scene for copper takeovers. mining markets copper
The company expects to double copper output after the second phase of its Quebrada Blanca project in Chile ramps up to full capacity by the end of this year.
Still, the difficulty for any potential suitor for Teck’s copper assets will be the new structure, post-breakup, which funnels royalties from a separated coal business to the base metals operations, as well as a six-year phase-out of a dual-class share structure, under which Canada’s Keevil family currently controls the company.
“Adding Teck Metals would position any major miner as a dominant player in base metals,” Citi analyst Alexander Hacking in a Tuesday note. “That said, six years can be a long time in equity markets and a lot could change between now and then.”“M&A is not part of the core strategy for Teck Metals at this point in time,” Chief Executive Officer Jonathan Price said in a Tuesday interview.
Moving away from the dual-class share structure is a “positive,” RBC Capital Markets analyst Sam Crittenden said in a note. “However, it will take several years and anyone expecting a more immediate change may be disappointed.” Canada’s Keevil family, which has been involved with the firm for six decades, has long controlled Teck through majority ownership of Class A shares, which carry more voting control than the company’s Class B shares. Those Class A shares are the ones getting phased out. Until then, the Keevil family remains in control.
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