The CEO of Teck Resources Ltd. defended his company’s growth strategy on Tuesday as dissident shareholders criticized what they called “underperforming” investments in coal and oilsands.
“Our strategy is very straight forward,” said CEO Don Lindsay in a webcast speech at the online Bank of America Securities Global Metals, Mining and Steel conference.
“Teck is implementing a copper growth strategy financed by the strong cash flows from steel-making coal and zinc. We are focused on rebalancing our portfolio to ultimately make our copper business bigger than our coal business, beginning with QB2, which will double our copper production on a consolidated basis.”
Construction of the US$5.2-billion Quebrada Blanca Phase 2 copper mine expansion in Chile is gradually returning to normal after the project was halted due to measures to control the COVID-19 pandemic, Lindsay said.
It is expected to open in 2022.
Copper’s future is bright because of its use in electric vehicles, clean power plants and transmission lines, along with its antimicrobial properties that are attracting attention during the COVID-19 pandemic, he added.
American investment firm Impala Asset Management released on its website this week excerpts from a letter to Teck’s board criticizing the company’s performance in the 15 years Lindsay has been in charge.
The criticisms are similar to those reportedly made by Tribeca Investment Partners earlier this month.
Impala charges destruction of more than $12 billion of shareholder value through Teck’s purchase of B.C. coal mines, its investment in the recently cancelled Frontier oilsands mine, other oilsands investments and the expansion of the Neptune terminals on the West Coast.
READ MORE: Kenney fires back at May and Blanchet, calls comments about oil industry ‘un-Canadian’
Teck’s shares closed Tuesday at $12.12. Its 52-week high of $30.81 was set last June.
Lindsay said Teck’s current woes are caused by historically low prices for its products, including coal, zinc, copper and oilsands bitumen.
“Our operating margins have fallen dramatically over the past 12 months due to commodity price declines and the impact of that is clear,” he said.
“But the underlying strength and longevity of the world-class assets in our portfolio has not changed and it represents significant upside potential once we emerge from this period.”
He reiterated a commitment to consider selling Teck’s minority stake in the Fort Hills oilsands mine in northern Alberta if the value of the project is not reflected in its share price.
READ MORE: Fort Hills oilsands project achieves first oil production
In an email response to the investor criticism, Teck spokesman Chris Stannell pointed out shareholders voted 98 per cent in favour of retaining Lindsay and other board members recently and the board chairman has indicated full support for company management.
Teck is primarily controlled by the Keevil family through its dual-class shares system.
READ MORE: Teck Resources exits energy industry group CAPP, citing cost cutting
Watch below: Some Global News videos involving Teck Resources.
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Jim Carr in Edmonton, speaks about Teck mine, Alberta economy -
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Teck Frontier oilsands withdrawal a wakeup for the country: Freeland -
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Teck Resources Frontier mine project abandonment signals need for government to work together on job growth, climate action: Minister Wilkinson -
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Teck mine dumped, rail blockades, and carbon tax ruling: Trudeau’s challenges -
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Teck Resources drops $20.6 billion Alberta oilsands project -
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Politicians jump all over Teck pulling out of Alberta mine -
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Teck pulling application ‘another straw on the camel’s back’ for Alberta’s economy: think tank -
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Kenney says he believes CN blockades had sway in Teck Resources decision to abandon mine project -
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Premier Jason Kenney says Teck Frontier mine approval should have been ‘straightforward and automatic’ -
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Teck Resources supports Canada’s climate change action: Trudeau -
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Scheer: Teck Frontier’s cancellation is a direct result of Trudeau’s weak leadership -
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Politicians point fingers after Teck pulls out of $20.6B oilsands project -
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Rachel Notley blames Jason Kenney for Teck Frontier mine shelved: ‘Step up before our province gets left behind’ -
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Teck Resources withdraws application for Frontier oil sands mine -
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Teck project environmental deal reached between First Nation and Alberta government
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