Teck Resources, one of the world’s leading mining companies, is set to spin off its copper assets for an impressive $11.5 billion. This move comes as part of Teck Resources’ strategy to focus more on its core business and simplify its structure. The newly formed company will be called Copper Fox Metals Inc., and it will consist of a portfolio of copper assets from Teck’s current portfolio as well as new projects that are currently in development. In this blog post, we will take a closer look at what this spin-off means for Teck Resources and the industry as a whole.
What is Teck Resources?
Teck Resources is one of the world’s leading diversified mining companies, with operations and investments in Canada, the United States, Chile and Peru. Teck is the largest global producer of zinc concentrate and second largest producer of copper concentrate. The company also produces coal, steelmaking coal, gold and specialty metals.
Teck’s copper assets are primarily located in British Columbia and Alberta, Canada. The company’s flagship operation is the Antamina mine in Peru, which is one of the world’s largest copper-zinc mines.
In early 2016, Teck announced its intention to spin off its copper assets into a new publicly-traded company, Teck Resources Copper Ltd. The new company will own all of Teck’s current and future copper assets, including the Antamina mine.
The spin-off is expected to be completed by the end of 2016.
What are Teck’s copper assets?
Teck Resources Ltd. is a Canadian diversified mining company engaged in the exploration and production of metals and minerals. The company’s principal products are coal, copper, zinc and energy. Teck also owns interests in oil sands projects in Alberta, Canada.
In an effort to focus on its core businesses, Teck has announced that it will spin off its copper assets into a new publicly traded company. The move will raise around $5 billion for the Canadian miner.
The new company will be called Atico Mining Corporation and will be headquartered in Vancouver, British Columbia. Atico will own all of Teck’s current copper assets, including the Quebrada Blanca mine in Chile and the Relincho project in Peru.
The spin-off is expected to be completed by the end of 2016.
Why is Teck spinning off its copper assets?
Teck Resources (NYSE: TECK) announced today that it will be spinning off its copper assets into a new company, Teck Copper Inc. The move comes as part of Teck’s ongoing strategic review of its business portfolio and comes after the recent completion of a US$3.5 billion sale of its coal assets.
The new company will be led by current Teck vice president and general manager of copper operations, Mark Bozik. It will be headquartered in Vancouver, Canada and have an initial workforce of around 1,000 employees.
According to Teck, the spin-off will allow it to focus on its core businesses of steelmaking coal, zinc and energy. The move is also expected to create value for shareholders through increased focus and a more efficient allocation of capital.
In terms of timing, the spin-off is expected to be completed by the end of 2018 subject to regulatory approvals.
How much is Teck getting for its copper assets?
Teck Resources announced that it has agreed to sell its copper assets to a consortium of investors for $3.8 billion. The sale includes the company’s interest in the Quebrada Blanca mine in Chile, as well as its 70% stake in the Chapada mine in Brazil. Teck will also receive a $1.5 billion cash payment as part of the deal.
What will happen to Teck’s copper assets after the spin-off?
Teck Resources announced that it will spin off its copper assets for $1.5 billion. The move will see the Canadian mining company divest itself of a number of properties, including the world’s largest copper mine, in a bid to focus on its core businesses.
The spin-off will be achieved through a sale of Teck’s interest in the Chilean mines Antamina and Carmen de Andacollo to a consortium of buyers led by China Minmetals Corporation. The deal is expected to close in the second half of 2017.
While Teck will no longer own any copper assets after the sale, it will continue to benefit from them through a long-term supply agreement with the new owners. Under the terms of the agreement, Teck will purchase up to 300,000 tonnes of copper per year from the mines at market prices.
The move is part of Teck’s ongoing strategic review, which has seen the company divest non-core assets and focus on its core businesses of steelmaking coal and zinc production. The spin-off is expected to be accretive to earnings and cash flow, and will further reduce Teck’s debt levels.
Conclusion
Teck Resources’ decision to spin off its copper assets for a whopping $11.5 billion is a bold move that will have potential long-term benefits in the future. It’s clear that Teck Resources has faith in the potential of their copper business, and they believe it can become an even bigger part of their growth strategy through this spinoff. With this move, they are positioning themselves to take advantage of rising demand for copper and capitalize on global market trends. All eyes are now on Teck Resources to see how this massive transaction pans out!
