Teck Is Back in Black

To get a sense of how dramatic a shift Teck Resources Ltd. has made, consider how the future looked as recently as 2007, according to a feature headlined “Teck’s Transformation” in the Globe and Mail: “Having blown the treasury on a series of high-priced acquisitions, Don Lindsay has created a diversified company with a future tied to surging copper. He says he’s laid the groundwork for the next 20 years.”


The Vancouver company, under president and CEO Lindsay’s leadership, had just spent $4.1 billion in cash and stock to buy Aur Resources Inc., a company with mines in Chile and Newfoundland producing more than 900,000 tonnes of copper a year. Teck had also committed with partner NovaGold Resources Inc. to develop the Galore Creek copper and gold mine in northern B.C. In the first half of 2008, 58 per cent of Teck’s operating profit came from copper. 


Well, the future, as Yogi Berra used to say, ain’t what it used to be. In fact it now looks a lot more like the past. While Teck still has significant income from copper and zinc, even with Galore Creek now on hold, it has also emerged as a major coal exporter, thanks to a badly timed $14-billion deal that brought the company to the edge of collapse. Profit in the first half of 2009 was off only slightly despite the downturn, but the source of those dollars had shifted dramatically: two out of every three dollars of Teck’s profit now come from coal. 


As governments talk tough on carbon emissions and climate change, Teck, one of the biggest employers in B.C. and a stalwart of the economy, appears to be betting its future on a resource more often associated with driving the steam engines of the Industrial Revolution than with powering the green economy. 


The Copper Room – on the 34th floor of the Bentall 5 tower, where Teck’s Vancouver headquarters are located – is marked with the metal’s elemental symbol, Cu, by the door. A large board table dominates the room and a wall of glass provides a view across the Burrard Inlet to North Vancouver.


“It’s a year you certainly wouldn’t want to go through again; I don’t mind saying that,” says Don Lindsay, leaning forward slightly in his chair. Still trim as he approaches his 51st birthday, Lindsay, a skier and a jogger, confesses to being a bit stiff from a weekend game of soccer with his two preteen daughters. As we talk in early October about Teck’s recent history, Lindsay says the company is stronger for having survived its near-death experience. But there’s no avoiding that it was an abysmal year for mining companies in general, and for Teck in particular. 


Teck, with a history going back to 1906, is one of the few titans of the B.C. economy. It owns interests in 13 zinc, copper and coal mines in B.C., Alberta, Newfoundland, Alaska, Peru and Chile. The company is roughly one-tenth the size of the world’s largest mining companies, BHP Billiton Ltd. and Vale SA, but it is still a major concern by B.C. and Canadian standards. BCBusiness recently ranked it the second-largest company in B.C., after Telus Corp., with revenues of almost $7 billion in 2008. Of Teck’s 9,800 employees around the world, 5,600 work in the province.