Teck Resources Ltd. TECK-A-T blew past profit expectations in its latest quarter, but Canada’s biggest base metals miner is warning that construction costs at its massive new copper mine will likely be higher than anticipated.
Vancouver-based Teck is just more than two thirds of the way through building its QB2 mine in Chile. The project’s construction costs were previously pegged at US$5.3-billion, but costs are now expected to rise by as much as 5 per cent, or US$263-million. The estimate has gone up because of engineering issues around QB2′s tailings facility, and its port.
QB2 is a key part of Teck’s strategy to tilt its portfolio increasingly toward copper and away from metallurgical coal, as investors pull back from minerals with particularly dirty environmental footprints. While the mining and processing of copper generates vast amounts of carbon, its applications in energy storage and other clean-energy areas give it a relatively clean environmental profile.
Harry (Red) M. Conger, Teck’s chief operating officer, said in a conference call with analysts that some of the increased costs are attributable to the fact that QB2′s port needs to be reinforced, because the sea floor underneath it is softer than anticipated.
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