Teck Resources CEO Jonathan Price
Teck Resources expects to generate annual earnings before interest, depreciation, tax and amortisation (Ebtida) of $3 billion if copper prices hit $5/lb, CEO Jonathan Price said on Tuesday.
For Vancouver, Canada-based Teck, copper is the main driver of profitability after it sold its steel-making coal business to a consortium of buyers led by Swiss miner Glencore for $8.9-billion last year.
Price, speaking at the Bank of America Metals, Mining and Steels conference in Miami, gave a range of predictions for Teck's annual Ebitda at different copper prices, the lowest being $2-billion if copper trades at $4/lb.
US copper prices on the CME hit a record peak on Tuesday, with the Comex May contract HGc1 hitting a high of $5.082/lb, fuelled by robust demand in the United States and fund buying.
The red metal has been in focus after mining giant BHP's $37-billion offer to buy out rival Anglo American. Analysts have been nudging Teck to explore acquisition options because it is flush with cash from the sale of steel-making business.
But Price said Teck is focused on executing its existing projects when asked whether the company would acquire any copper assets.
"I know there's a lot of discussion in the industry about buy versus build," Price said." And I think when people are looking at projects with capital intensities above $30 000/t, perhaps buying capacity makes more sense."
Several industry estimates suggest the cost of building a new copper mine today is around $44 000/t.