Teck sees $3bn in annual EBITDA if copper stays around current levels

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 per pound.

US copper prices on the CME hit a record peak on Tuesday, with the Comex May contract hitting a high of $5.082 a lb, fueled 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 per ton, perhaps buying capacity makes more sense.”

Several industry estimates suggest the cost of building a new copper mine today is around $44,000 per tonne.

(By Divya Rajagopal; Editing by Jonathan Oatis and Leslie Adler)