Soaring copper prices have gotten Teck Resources (TSX:TECK.B, NYSE: TECK) off to a very good start in 2021, with the company reporting first quarter profits that were 247% higher than Q1 2020.
“So strong operational performance and higher commodity prices contributed to a very solid start to 2021 and the first quarter,” Teck CEO Don Lindsay said today in a first quarter earnings call. “Our operations continue to be resilient despite ongoing challenges associated with COVID-19.”
The company also announced it has reached the half-way point in the expansion of its QB2 copper mine in Chile, and marked the commissioning of the newly upgraded Neptune Terminal in North Vancouver, which is co-owned by Canpotex Bulk Terminals Ltd. and a Teck subsidiary, Teck Coal Partnership.
Teck reported first quarter profits attributable to shareholders of $326 million, compared with $94 million in Q1 2020.
While the company’s gross profits were down slightly compared to Q1 2020 for steel making coal and oil (Teck owns a stake in the Fort Hills oil sands project), they were up substantially for copper.
Copper prices have roughly doubled since April 2020, recently hitting a ten-year high of US$4.50 per pound.
“Our copper business unit had a strong Q1 with a 205% increase in EBITDA compared to the same period last year, reflecting a substantially higher copper prices,” Lindsay said in today’s earnings call.
“We achieved major milestones for our priority projects, including surpassing the half-way point at our flagship QB2 copper growth project and moving into the commissioning phase of our Neptune steelmaking coal terminal upgrade."
Last year, Teck withdrew its $20 billion Frontier oil sands project from the environmental review process. The company now appears to be more focused on copper, which Lindsay pointed out are now called "green metals" due to their importance in a global energy transition.
"We remain focused on Teck's prudent copper growth strategy going into green metals as they're now called," Lindsay said.
"We believe Teck is one of the best positioned companies globally to capitalize on the strong demand growth that we see for green metals and in particular, for copper."
Teck's stock has more than doubled in value since this time last year, with prices rising from $12.27 per share one year ago, on April 28, 2020, to today's close of $27.82.