Teck Resources Lowers Output Forecast at Chile Copper Mine Amid Operational Setbacks
Teck Resources Cuts Copper Production Forecast at Quebrada Blanca Mine Due to Tailings and Equipment Issues
Teck Resources Ltd. has reduced its 2024 production guidance for its flagship Quebrada Blanca copper mine in Chile, citing ongoing operational challenges that continue to hinder its ramp-up efforts.
The large-scale open-pit mine, known as QB2, is located in the high Andes and is experiencing issues related to tailings storage.
In its latest earnings statement and conference call on Thursday, Teck disclosed that these issues are not only requiring additional spending but are also constraining copper production.
This setback follows earlier delays caused by plant commissioning problems and geotechnical challenges.
The mine’s ramp-up has already come in approximately $4 billion over budget and years behind schedule.
These ongoing difficulties highlight the broader challenges the mining industry faces as it works to increase copper supply amid a looming global shortage of the critical metal.
QB2 is a cornerstone of Teck’s strategic shift to focus solely on metals following its planned exit from coal.
The mine is expected to eventually double Teck’s total copper output, making its successful ramp-up vital to the company’s growth ambitions.
Analysts at Jefferies, including Christopher LaFemina and Patricia Hove, emphasized the importance of QB2 to Teck’s investment appeal.
“The market is unlikely to give Teck credit for this ramp-up until it’s fully realized, given concerns about potential structural issues at the site,” they wrote in a note to clients on Thursday.
Teck originally forecasted Quebrada Blanca to produce between 230,000 and 270,000 metric tons of copper in 2024. That range has now been revised down to between 210,000 and 230,000 tons.
Despite the setbacks, Teck maintains its long-term guidance and expects the tailings issues to be resolved in the near term.
However, the company is also contending with ongoing repairs to a ship loader at the mine, work that is now expected to extend into the first half of 2025. Teck stated that these repairs are not anticipated to affect overall copper output.
Teck holds an indirect 60% interest in the Quebrada Blanca operation. The company is also exploring potential synergies with the nearby Collahuasi mine, a joint venture between Anglo American Plc and Glencore Plc, which each own a 44% stake.
