Teck Resources Defers Growth Projects to Resolve Issues at Chile Mine

Teck Resources Ltd. has decided to postpone major growth initiatives to address ongoing operational challenges at its Quebrada Blanca copper mine located in Chile. In a statement released late on Tuesday, the Canadian mining company announced it is undertaking a review of the “QB” operation, with a specific focus on enhancing drainage from its tailings facility.

This strategic shift comes alongside significant personnel changes, including the retirement of Chief Operating Officer Shehzad Bharmal. Teck has appointed an unnamed industry veteran as an advisor to the senior management team, aiming to strengthen leadership during this critical phase.

Teck emphasized its commitment to ensuring that the Quebrada Blanca operations achieve reliable long-term performance. The company made it clear that no further major projects will be approved until the mine reaches stable operational levels and meets its ramp-up targets.

Teck had heavily depended on the future of Quebrada Blanca, one of the largest new copper mining operations globally, which commenced commercial production last year. The project plays a crucial role in Teck’s strategy to transition from coal to metals that are essential for energy sustainability. However, the operation has encountered significant setbacks, including a $4 billion budget overrun and delays that extend far beyond the original schedule.

In July, Chief Executive Officer Jonathan Price was compelled to revise production forecasts, primarily due to ongoing issues with tailings storage. In its statement, Teck outlined that the immediate objective is to facilitate “unconstrained production” by raising the height of the tailings dam wall. The company has committed to substantial work through 2025 to enhance drainage effectiveness, although it acknowledged that more efforts are necessary to meet design specifications.

The operational difficulties at Quebrada Blanca have affected Teck’s market valuation and contributed to a tightening of global copper supply. Concurrent disruptions elsewhere, notably at Ivanhoe Mines Ltd. in the Democratic Republic of Congo, have provided upward pressure on copper prices, which recently reached a five-month peak in London.

Teck has indicated that it has engaged a “respected industry leader” with over three decades of experience, particularly in Chile, to serve as a senior advisor to both the CEO and the Quebrada Blanca team. Although the individual has not been publicly named, this move is part of Teck’s strategy to enhance its operational management.

Following Bharmal’s retirement, the company’s senior vice presidents overseeing operations in both Latin America and North America will now report directly to Price. The review of the Quebrada Blanca operations is set to conclude by October 2025, with updated operational guidance expected to be released alongside the company’s third-quarter results.

In the past year, Quebrada Blanca produced just over 200,000 metric tons of copper. The mine’s ownership structure includes 60% held by Teck, 30% by Japan’s Sumitomo Corp., and 10% by the Chilean state-owned mining company Codelco.