Teck Resources (NYSE:TECK) Conference Transcript

Teck Resources Conference Call Summary Company Overview - Company: Teck Resources (NYSE: TECK) - Industry: Mining, specifically focused on copper and zinc operations Key Highlights 1. Merger with Anglo American: Teck is progressing towards a merger with Anglo American, which is expected to position the combined entity as a top five global copper producer with over 1.2 million tons of annual copper production supported by six world-class copper assets [3][4] 2. Regulatory Approvals: The merger has received completion and antitrust approvals from multiple jurisdictions including Canada, Chile, Australia, Japan, the EU, and the US, with only two approvals remaining [4] 3. Operational Review: A comprehensive operational review was completed, leading to a strong operational performance in 2025 and reaffirmation of annual production guidance for 2026 to 2028 [4][11] 4. Financial Performance: In 2025, Teck reported a 48% increase in Adjusted EBITDA to $4.3 billion, driven by higher copper prices and increased by-product revenue, resulting in an adjusted EBITDA margin of approximately 50% in Q4 [5][6] 5. Shareholder Returns: Teck returned $1.3 billion to shareholders through share buybacks and dividends in 2025, maintaining a robust balance sheet and returning to a net cash position by year-end [6] Operational Insights 1. Quebrada Blanca (QB) Performance: QB's quarterly copper production reached 55,000 tons, with significant progress on the TMF development work, expected to enable steady state operations by the end of 2026 [5][9] 2. Production Guidance: Teck reaffirmed its annual production guidance for 2026 to 2028, with expectations of further growth in copper production and significant operating cash flows [11][12] 3. Copper Price Outlook: The copper price reached record highs in Q4 2025, with a quarterly average exceeding $5 per pound, and a consensus price increase of 35% from $4 to $5.35 per pound for 2026 [13][14] Market Dynamics 1. Demand Drivers: The demand for copper is expected to outpace economic growth, driven by urbanization, electrification, and the expansion of the electrical grid, with a near double-digit CAGR anticipated through the end of the decade [16] 2. Supply Constraints: Existing mine production is expected to decline starting in 2027, with limited growth options beyond 2029, creating a compelling long-term outlook for copper [17][18] 3. Investment Opportunities: Teck plans to unlock additional copper production through optimization projects, including a potential increase of 175,000 tons per annum from processing higher-grade ore from Quellaveco [27] Strategic Focus 1. Critical Minerals Strategy: Teck has refocused its portfolio on critical minerals, exiting its energy and steelmaking coal businesses, and completing the QB2 project, which is expected to generate substantial cash flow for decades [18][19] 2. Value Creation from Merger: The merger with Anglo American is expected to deliver $800 million in annual corporate synergies and $1.4 billion in annual underlying EBITDA uplift from combined operations [20][21] 3. Future Growth: Teck aims to balance capital investment in growth projects with shareholder returns, focusing on high-return opportunities within the combined portfolio post-merger [29] Additional Considerations 1. Chinese Regulatory Review: The merger is undergoing a normal regulatory review process in China, with no anticipated changes to the expected timeline of 12-18 months for completion [32] 2. Operational Stability: The company is focused on maintaining operational stability and executing its plans effectively, with significant improvements noted in the TMF development work [24][25]