VANCOUVER – Canada’s largest mining company Teck Resources Ltd. is keeping an eye on possible acquisitions but expects considerable growth from its current properties, chief executive Don Lindsay said Friday.
“So far the acquisitions just haven’t been appealing for us to make a move,” Lindsay told analysts, a day after Teck reported that its adjusted quarterly profit was $663 million, beating expectations.
“We know that at the end of five years we will have substantially more copper production per share, substantially more coal production per share, we’ll have oil sands in production and that looks like a pretty good base strategy,” he said.
“Acquisitions need to be measured against that.”
During the 2006 to 2008 period of consoidation in the global mining industry, Teck Resources made several acquisitions. When credit became hard to get following the collapse or near failure of several major U.S. financial firms, Teck was forced to sell assets to reduce its debtload to a manageable level.
Higher prices for steelmaking coal and copper helped Teck Resources (TSX:TCK.B) post a big increase in second-quarter profits.
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Reporting after markets closed on Thursday, the Vancouver-based miner said earnings attributable to shareholders were $756 million, or $1.28 per share, compared with $283 million or 48 cents per share in the same 2010 quarter.
Adjusted quarterly profit was $663 million or $1.12 per share, compared with $347 million or 59 cents per share in the second quarter of 2010.
Revenue in the three months ended June 30 was $2.8 billion, up from $2.2 billion.
Teck was expected to earn $1.02 per share in adjusted earnings on $2.68 billion of revenues in the second quarter, according to analysts surveyed by Thomson Reuters.
“Our adjusted earnings … were nearly 90 per cent higher than earnings in the second quarter of 2010 with the increase due mainly to higher prices for coal and copper,” Lindsay said in a statement on Thursday.
Teck had earlier reduced its coal production guidance for the second quarter and said unit mining costs would be greater as a result of higher labour and other expenses.
It said coal sales should be at the low end of its previously announced guidance range of 5.5 million to six million tonnes.
The company also said it was reducing production guidance as a result of the March 11 earthquake and tsunami in Japan. Some customers had deferred shipments due to reduced steel production requirements, it said.
Teck is a diversified resource company involved in copper, coal, zinc and energy. It has mines in Canada, the U.S., Chile and Peru.
The company also holds a 20 per cent stake in the undeveloped Fort Hills oilsands project north of Fort McMurray, Alta., Suncor Energy Inc. (TSX:SU) holds a 40.8 per cent stake, while Total owns the remaining 39.2 per cent.
On the Toronto Stock Exchange, Teck shares were down 39 cents to $47.49 in mid-afternoon trading on Friday.