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When Teck Resources Ltd. holds its quarterly earnings conference calls, chief executive Don Lindsay is always asked about acquisition opportunities. His usual response is that Teck is looking, but price tags are too high.
That changed on Thursday’s call. He acknowledged that values have come down in recent months and more assets have come available. That includes projects in the iron ore sector, an industry that Teck has been eager to break into for years. Mr. Lindsay also speculated more assets could come available as many large mining companies are writing down projects, firing senior management and cleaning up their portfolios.
Teck has not made a major acquisition since 2008, and this would be a reasonable time to do it. In addition to the iron ore opportunities, the Vancouver-based miner is facing declining copper production over the next couple of years. Its key copper growth projects in Chile are being held up by permitting delays, meaning it is unclear when they will reach production.
“Something that might fill the gap would be of interest to us,” Mr. Lindsay said. However, he tempered speculation that Teck will do a deal. He said it remains “pretty tough” to pull off a successful transaction, and pointed out that Teck’s “stay the course” strategy of organic growth is poised to deliver major production increases for shareholders in the years ahead.
“It’s kind of an odd time in the industry right now. You can’t build anything because you [either] can’t get permits or the market is worried about cost over-runs, and you can’t buy anything because the market is worried about overpaying,” he said.
For the rest of this article, please go to the National Post website: http://business.financialpost.com/2013/02/07/teck-resources-changes-tune-on-acquisition-opportunities/