Low-cost copper production

Copper is Teck’s second largest source of revenue. With prices stuck near the $3.00 per pound mark, you would expect profits to be scarce. In fact, Teck still does quite well on its copper sales, even at rock-bottom prices. In the second quarter Teck reported gross profit margins of 25% on copper with an average realized price of $3.08 per pound.

Effective management of capital

Teck embarked on an aggressive cost-cutting program in 2012, and has been very successful at maintaining profitability through the difficult market conditions. The company is now a lean, mean, mining machine and well positioned for the rebound in met coal and copper. In its latest report, Teck said it had already reduced 2014 operating expenses by $150 million and reduced capital expenditures by another $150 million.

Fort Hills project

Investors are avoiding anything that smells of oil sands these days, but it is important to point out Teck’s 20% ownership of the Fort Hills project that will start producing 160,000 barrels per day in 2018.

When we talk about that huge diesel consumption. If you ask me... Teck will supply all the trucks themself.