Brazil’s Gerdau buys out Sumitomo Corp and JSW in Gerdau Summit
The transaction is expected to close in early 2025.
Teck Resources (TSX: TECK.A | TECK.B) (NYSE: TECK) shares plunged to their lowest point in seven months after the Canadian miner raised the cost of its flagship copper mine in Chile once again.
Teck, which has spent much of this year fighting off a hostile approach from Glencore Plc, said its Quebrada Blanca 2 project would now cost between $8.6 billion and $8.8 billion, compared with an earlier estimate of $8 billion to $8.2 billion. The Vancouver-based firm cited further construction delays that highlight the challenges of expanding supply of the metal.
Teck shares fell 6.50% to C$49.78 in Toronto on Tuesday at 11:46 am., the biggest intraday drop since March 15.
QB2, which Glencore wanted to acquire earlier this year before switching its focus to buying Teck’s coal business, is seen as one of the best copper projects in development, but it has been hit by a series of cost blowouts and delays.
The project, which in early 2019 was estimated to cost just $4.7 billion, was hit by pandemic disruptions and related logistical challenges exacerbated by Russia’s invasion of Ukraine. Mines are getting trickier and pricier to build around the world amid heightened social and environmental scrutiny and deteriorating ore quality. Higher interest rates and lower metal prices generate further headwinds for investments.
The project suffered another blow ahead of a ribbon-cutting event scheduled for Thursday. Last week, regional environmental regulators recommended against approval of $3 billion milling expansion at QB2. The rejection, which isn’t definitive, was based on a failure to correct previously raised errors, omissions and inaccuracies.
QB2 is completing its ramp-up this year after churning out first concentrate in March. At full production, it will double Teck’s copper output. The Vancouver-based firm owns an indirect 60% interest, with Sumitomo holding 30% and state-owned Enami 10%.
In a statement released early Thursday, Teck also cut its production targets for the second straight quarter as the company grapple with operational setbacks at both its copper and coal operations.
Teck said it will now produce between 320,000 tons and 365,000 tons of copper this year, compared with an earlier forecast of 330,000 tons to 375,000 tons, after a geotechnical event at Highland Valley Copper. It also lowered its steel-making coal target to between 23 million tons and 23.5 million tons.
(By Thomas Biesheuvel, James Attwood and Jacob Lorinc)
Comments
Bobby44
A cost over run of $ 600k on a recent estimate of $ 8.2B amounts to rounding errors in today’s world. Not a reason for the kind of drop in share price. It could be the market is worried about government pushing because of past transections.