Teck ups stake in Chile Quebrada Blanca copper mine in $162.5m deal

“Quebrada Blanca Phase 2 is a high quality, long-life asset in a low risk jurisdiction that will operate through multiple price cycles at a low-cost, substantially increase Teck’s copper production, and generate significant value,” the company’s President and CEO, Don Lindsay, said in the statement.

The transaction consists of $52.5 million paid in cash on closing, an additional payment of $60 million payable once social and environmental permits have been issued, and a further $50 million payable within 30 days of Quebrada Blanca Phase 2 first production.

Teck said that it may pay additional amounts if the average copper price exceeds $3.15 per pound in each of the first three years following beginning of production, up to a cumulative maximum of $100 million.

In February, Teck said a decision on whether or not to go ahead with Phase 2 at Quebrada Blanca depended on regulatory approvals and market conditions, adding that the company would determine that option in the second half of 2018.

If Teck decides to move forward with the mine expansion, the development of the hypogene ore body would come at a hefty price tag of some $4.7 billion for major infrastructure investments, including a new concentrator and desalination plant and pipeline. But the mine is nearing the end of its life and the expansion will keep it producing for at least another 25 years.

Last year, Quebrada Blanca produced 23,400 tonnes of copper, generating a $182 million-revenue.

Copper, one of four business units at Teck besides steelmaking coal, oil and zinc, is considered a company’s priority.