Teck produces first copper concentrate from QB2 in Chile

Teck Resources (TSX: TECK.A/TECK.B; NYSE: TECK) has produced the first bulk copper concentrate at its Quebrada Blanca Phase 2 (QB2) project in Chile as the project advances to full production later this year.

A critical growth project for Teck, QB2 was initially expected to begin production in 2021 but has faced several construction delays due to Covid-19 disruptions.

“First copper concentrate production at QB2 is an important milestone as we advance our commissioning and ramp up plan towards full production this year,” CEO Jonathan Price said in a statement Friday afternoon.

The project’s majority owner said that at full production, QB2 will double Teck’s copper output. The operation is targeted to achieve 285,000-315,000 tonnes of yearly copper production in 2024-2026. Teck said its 2023 copper production guidance remains unchanged at 390,000-445,000 tonnes of red metal.

As one of the world’s largest undeveloped copper resources, QB2 has an initial mine life of 27 years using only about 18% of reserves and resources. Teck says the deposit has potential to grow even more.

The company has incorporated into the mine design advanced sustainability practices, including the first large-scale use of desalinated seawater for mining in Chile’s Tarapacá Region. An agreement is also in place to source 100% renewable power from AES Andes for the operation beginning in 2025.

Teck owns an indirect 60% interest in Compañía Minera Teck Quebrada Blanca (QBSA), the owner of QB2. Sumitomo Metal Mining, together with Sumitomo Corp. have a collective indirect 30% interest in QBSA. Chilean state miner ENAMI has a 10% free-carried interest.

In October, Teck announced another budget blowout for QB2, this time adding a minimum of $500 million to bring the total capital cost to between $7.4 billion and $7.8 billion. That was up from July 2022 guidance of $6.9 billion to $7 billion, and an earlier estimate of $4.7 billion.

Canada’s largest diversified miner, Teck recently announced plans to split out its steelmaking coal business to shareholders and focus on base metals.

Teck’s most-traded Class B shares on Friday closed up nearly 80¢ apiece at $49.35, giving it a market capitalization of $25.6 billion.