Teck’s QB turnaround lifts hopes for $53B Anglo merger

Core Viewpoint - Teck Resources' Quebrada Blanca mine in Chile is showing signs of recovery, which is crucial for its $53 billion merger with Anglo American, as it raises questions about the mine's viability and future role [1][5]. Group 1: Mine Performance and Recovery - Mill throughput and copper recoveries at Quebrada Blanca are now meeting expectations due to an action plan initiated in August [2]. - The "QB Action Plan" includes significant upgrades to tailings infrastructure, with 59% of the mine's cyclones replaced, and full replacement expected by the end of 2025 [3]. - The current mine plan utilizes only 15% of Quebrada Blanca's resource base, indicating potential for long-term growth [4]. Group 2: Merger and Integration - The turnaround at Quebrada Blanca coincides with the merger between Teck and Anglo American, which aims to create the world's largest copper mine by the early 2030s [5]. - The integration of Quebrada Blanca with Anglo's Collahuasi mine, located just 15 km away, is a central feature of the merger [6]. - The combined QB-Collahuasi complex is projected to yield around one million tonnes of copper annually, with a proposed conveyor system expected to add 175,000 tonnes of copper output per year between 2030 and 2049 [7]. Group 3: Financial Projections and Market Position - The integration of operations is anticipated to generate up to $1.4 billion in additional annual EBITDA and $800 million in pretax synergies through improved procurement and operations [8]. - Teck is valued at $10.8 billion on a post-tax, sum-of-the-parts basis, with $13.8 billion attributed to copper assets, excluding synergy gains from the merger [9]. - If completed, the merger would position Anglo-Teck among the top five global copper producers, with an output of 1.35 million tonnes annually, surpassing Escondida's projected output of 1.28 million tonnes in 2024 [9].