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The Fight for More Copper

The Fight for More Copper

Teck Resources is a $23 billion-dollar mining giant.

They have two major divisions: one that mines coal, and one that mines EV battery metals like copper and nickel.

As copper continues to climb in value, it has every major mining company greedily eyeing Teck’s vast copper operations.

But the question that remains is what to do with all that coal, which nobody wants to touch, given its declining popularity and value.

In a sign of the times, Teck no longer believes it’s possible to run both a “dirty” and a “clean” operation at the same time. So Teck wants to take their valuable copper operations, which currently produces 400,000+ tonnes a year into, and move them to a “pre-eminent, pure-play base metals company with a greater array of value creating opportunities.” The want to clean up their cash cow so it can fetch top value.

In the meantime, mining giant Glencore is attempting to snatch up Teck’s copper with a hostile bid, while prices are still good. Teck has managed to hold out so far against the low-ball offers, but we’re likely just getting started on what’s shaping up to be a title fight between heavyweights.  

All of this is yet more evidence that the market for copper is heating up fast.

In fact, by the time you read this, some details on the offer will already be out of date.

Will Teck spinoff their coal operations, as many hope? Will Glencore find enough money for a buyout — whether it includes the coal assets or not? Will other big players like Newmont or Freeport McMoRan jump in with a better deal?

But one thing won’t change, regardless of how the Teck offer plays out: and that’s the growing value of copper projects as demand pushes prices higher and higher. According to CNBC, copper stockpiles are already dwindling, and those shortages will increase as the decade wears on. This won’t be the last major consolidation attempt we’ll see.

It’s also going to create major opportunities for us as investors. The copper boom is underway — and we’ll cover those possibilities as they emerge.

John Carl
Profit Cycle Pro