|Bid||12.52 x 2200|
|Ask||0.00 x 4000|
|Day's range||13.02 - 13.39|
|52-week range||12.72 - 25.75|
|Beta (5Y monthly)||2.36|
|PE ratio (TTM)||2.99|
|Forward dividend & yield||0.15 (1.11%)|
|Ex-dividend date||11 Dec 2019|
|1y target est||32.12|
(Bloomberg) -- Canadian Prime Minister Justin Trudeau’s desire to be seen as a climate-change crusader is again butting up against the reality of the nation’s formidable oil industry.This time the conflict is over Teck Resources Ltd.’s proposed Frontier oil-sands mine, which Trudeau’s cabinet is expected to approve or reject this month.Approving the mine would hurt Trudeau’s standing among his environmentalist base, many of whom already are disappointed with his C$4.5 billion ($3.4 billion) purchase of the Trans Mountain pipeline and now sometimes refer to him as “Justin Crudeau.” Meanwhile, rejecting Frontier would cause an uproar in conservative Alberta, where recent struggles in the oil industry have given birth to a fringe separatist movement.Yet for all the sound and fury around the Teck Frontier project, there is an uncomfortable truth hanging over the whole exercise: The mine may never actually be built.That’s because the oil world is completely different than when Teck first proposed the mine in 2011. At that time, worries abounded that the world was running out of crude and prices regularly topped $100 a barrel. Canada’s oil sands, which contain the world’s third-largest reserves, saw a boom of spending as companies and countries rushed to secure supplies.Then, fracking techniques unlocked massive reserves in Texas’s Permian Basin, helping the U.S. surpass Russia and Saudi Arabia to become the world’s top oil producer, with output more than doubling in less than a decade to about 13 million barrels a day.That flood of new supply has warped the global oil market and weighed on prices ever since. Teck’s application relied on long-term oil prices of $95 per barrel during its operating life from 2026 to 2066, according to a government review of the project last year. Neither West Texas Intermediate nor Brent crude have hit that level since 2014, and they are both below $60 now. Prices are even lower in Canada, where the Western Canadian Select benchmark is trading under $40 a barrel.“It’s not economically viable at these oil prices,” Laura Lau, who helps manage C$2 billion in assets at Brompton Corp. in Toronto, said in an interview. She estimated Teck would need an extended period of $70 to $80 oil before moving ahead. “They’re not going to make a final investment decision in the current oil environment.”The application also banked on increased pipeline shipping capacity out of Alberta, but two projects Teck expected would be built -- Enbridge Inc.’s Northern Gateway and TC Energy Corp.’s Energy East -- have since been canceled. Others, such as Enbridge’s Line 3 and TC Energy’s Keystone XL, have been delayed by years and still face uncertain futures.In fact, the transportation situation has grown so restrictive that Alberta’s government implemented mandatory production cuts last year to prevent a glut of oil from overwhelming the province’s pipelines and storage facilities and crashing prices. The province had planned to lift those restrictions at the end of last year, but had to extend them through this year because of delays to Enbridge’s Line 3 expansion.That prompted Exxon Mobil Corp.’s Canadian unit, Imperial Oil Ltd., to delay its C$2.6 billion Aspen oil-sands project, which had been approved and was scheduled to start production in 2022. Imperial Chief Executive Officer Brad Corson said last month that the company is still waiting for the curtailment policy to lift and for market and shipping dynamics in Alberta to improve before moving ahead.Teck still hasn’t committed to building Frontier if it’s approved. The Vancouver-based company’s current focus is on advancing the project through the regulatory process, and further decisions will depend on the outcome of that process, market conditions and other considerations, said Chris Stannell, a Teck spokesman.Teck CEO Don Lindsay said at an investor conference in Banff, Alberta, last month that the company will need a partner to develop the project with, sufficient pipeline capacity and high enough oil prices to justify the investment.For Trudeau, the question of whether to approve the mine is a particularly thorny test of his repeated slogan that environmental protection and economic growth go hand in hand.The mine is projected to create 7,000 jobs during construction and as many as 2,500 operating positions during its four-decade life, while contributing about C$70 billion to federal, provincial and municipal governments, according to regulatory documents. The project also would include best-in-class technology that would produce oil with less greenhouse gas emissions per barrel than about half of all oil refined in the U.S., according to the documents.Yet, the mine still would produce about 260,000 barrels of crude a day, more than the daily oil consumption of Norway, and emit the equivalent of about 4.1 million tons of carbon-dioxide a year. That would make it more difficult for Canada to meet its commitment to cut greenhouse gas emissions 30% below 2011 levels by 2030 and to reach net zero emissions by 2050.About 49% of Canadians support the project, while 40% oppose it and the remainder are undecided, according to a poll by the Angus Reid Institute released Wednesday.Alberta’s conservative Premier Jason Kenney already is ratcheting up the pressure on Trudeau, saying in a letter to the prime minister there is “no reason specific to this project that would justify denying federal cabinet approval.”“A decision to kill the project at this late hour, after all that Teck has done to satisfy regulators and social and environmental concerns, would echo in global markets like a slamming door,” Kenney said in the letter.The project has broad support in Canada’s oil industry, with the CEOs of rival oil-sands firms saying rejecting Frontier would hurt investors’ confidence in Canada and put a chill on future projects. Brompton’s Lau also said canceling the project would hurt investors’ view of Canada.As with any large energy project in Canada, Frontier would likely face fierce opposition, and possibly legal challenges, if approved. A number of environmental groups have already lined up against the project, including Indigenous Climate Action and Greenpeace Canada, which has a photo on its Twitter feed of actors Jane Fonda and Joaquin Phoenix holding signs bearing the hashtag “RejectTeck.”While the project has the support of 14 affected Alberta First Nations and Metis communities, the project has faced some indigenous opposition as well. The Smith’s Landing First Nation, which is located in the Northwest Territories along a watershed that runs near Frontier, has called on the government of the territory to speak out against the project and is lobbying federal ministers to block it. The group would consider suing if the project is approved, Chief Gerry Cheezie said in an interview.“The government makes promises to us, then breaks them and expects us to act as good little Indians,” Cheezie said. “That’s going to stop.”Opposition to the project has been brewing since it was first proposed in 2011 and will continue even if it’s approved, said Eriel Deranger, a member of the Athabasca Chipewyan First Nation and executive director of Indigenous Climate Action.“The viability of this project is becoming weaker the longer the debate goes on because of the economic constraints, because of the trends in the oil and gas sector,” Deranger said in an interview. “All sorts of different things are creating more risk for this project.”(Updates with poll in 17th paragraph)To contact the reporter on this story: Kevin Orland in Calgary at firstname.lastname@example.orgTo contact the editors responsible for this story: Derek DeCloet at email@example.com, Carlos Caminada, Christine BuurmaFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Teck Resources Ltd., which is proposing a new oil-sands mine in Canada, set a goal of becoming carbon neutral from its operations and activities by 2050.Reaching the goal will entail evaluating alternative ways of moving materials at mines, using cleaner power sources and improving efficiency, Vancouver-based Teck said Monday. The company said it already has implemented projects to reduce greenhouse gas emissions at its operations by 289,000 tons since 2011.Teck, which produces copper, coal, zinc and oil, is setting the target as the Canadian government weighs approval of its proposed Frontier oil-sands mine in Alberta. The project would cost C$20 billion ($15 billion) to build and produce 250,000 barrels of crude a day, more than the daily oil consumption of Norway.Oil-sands producers including Cenovus Energy Inc. have also set goals of becoming carbon neutral. Like the goal Teck announced on Monday, those targets include direct emissions from their operations and indirect emissions from the generation of energy they use, but not the emissions that come from burning the fuels they produce.Greenpeace Canada criticized Teck for announcing a plan to cut emissions from its operations while considering an oil-sands project that will help fuel cars with gasoline and diesel. Chris Stannell, a spokesman for Teck, said emissions intensity at Frontier would be approximately one half of the oil sands industry average. The crude produced there would also have a lower carbon intensity than about half of the oil currently refined in the U.S., he said.Teck hasn’t yet committed to building Frontier, even if it gets government approval. Chief Executive Officer Don Lindsay said last week that the company will need a partner to develop the project with, adequate pipeline capacity and strong enough oil prices before deciding to go ahead with it. Teck owns about 21% of the Fort Hills oil-sands mine, which opened in 2018.(Updates with company and Greenpeace comment in fifth paragraph)To contact the reporter on this story: Kevin Orland in Calgary at firstname.lastname@example.orgTo contact the editors responsible for this story: Simon Casey at email@example.com, Carlos Caminada, Steven FrankFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Teck Resources Ltd.’s proposed Frontier oil-sands mine won votes of confidence from the heads of two rival crude producers as Canada weighs a decision on the project.The mine in Alberta won the green light from a government panel last year, and Prime Minister Justin Trudeau’s cabinet may decide on the project’s fate by the end of next month. The mine would cost about C$20 billion ($15 billion) to build and produce 250,000 barrels a day after going into operation by 2026.Cenovus Energy Inc. Chief Executive Officer Alex Pourbaix, speaking at an event in Calgary, said the industry is seeking certainty that it can get projects approved if they meet regulators’ requirements and go through “tough, transparent and challenging” assessments.“You have a proponent that has been advancing this project for 10 years, and it looks to me like they’ve done everything right,” Pourbaix said in response to reporters’ questions. “They’ve received all the approvals and the positive reports, and if it were not to be approved, that would be a challenge.”Suncor Energy Inc. CEO Mark Little said in an interview with BNN Bloomberg Television that Canada should help meet rising global demand for crude and that new oil-sands facilities are using technology that puts their carbon intensity on par with the North American average, reducing their environmental impact. Suncor partnered with Vancouver-based Teck on the Fort Hills oil-sands operation that opened in 2018.Rejecting Frontier would be “a big hit on investor confidence in Canada,” Little said.Teck, for its part, hasn’t committed to building Frontier. CEO Don Lindsay said at investor conference on Wednesday that the company will need a partner to develop the project with, adequate pipeline capacity and strong enough oil prices before deciding to go ahead with it.To contact the reporter on this story: Kevin Orland in Calgary at firstname.lastname@example.orgTo contact the editors responsible for this story: Simon Casey at email@example.com, Carlos Caminada, Joe CarrollFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- A rift between between Teck Resources Ltd. and the company it uses to export its coal widened as the Vancouver-based miner publicly accused the shipper of charging too much and contaminating some freight.The head of Teck, already shifting some steel-making coal freight away from Westshore Terminals Investment Corp., said on Wednesday that the export facility had contaminated “dozens” of shipments. Teck was forced to build its own terminal quickly, before a permit lapsed and its contract with Westshore expired, which drove up capital costs, according to Chief Executive Officer Don Lindsay.“We had a lot of trouble with Westshore,” Lindsay told analysts at an industry conference in Banff, Alberta. “We’re not happy that the capex doubled. We had to get away from a company that used monopolistic pricing practices.”Westshore, also based in Vancouver and operated by billionaire Jim Pattison, is the largest coal-loading facility on the west coast of the Americas. The company refuted Teck’s allegations.Because Westshore had a 10-year contract with Teck, employees were able to ship the company’s coal “when they liked,” which often was not when prices were high, Lindsay said. That practice cost Teck $200 million in earnings before interest, taxes, depreciation and amortization during one quarter in 2018, when a million tons of sales were lost at a time coal margins exceeded $200 per ton, he said.“We certainly disagree with the first two comments about not adhering to the contract and having tons of trouble with Westshore,” Nick Desmarais, Westshore’s corporate secretary, said by phone, referring to Teck’s allegations including the contamination of its coal. “And our rates are market rates.”“They were contaminating our coal with thermal coal,” Lindsay alleged. “We had dozens and dozens and dozens of incidents, including one incident where it was so severe that our largest customer stopped sending ships to them.”To contact the reporter on this story: Danielle Bochove in Toronto at firstname.lastname@example.orgTo contact the editors responsible for this story: Luzi Ann Javier at email@example.com, Joe RichterFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Canada’s controversial oil sands are staring down the barrel of the gun, with a decision looming that could signal the end for the region’s production
(Bloomberg) -- Justin Trudeau returns to a fragmented parliament Monday facing sharp domestic divisions with the clock ticking on two of the tougher decisions of his political career.The prime minister must determine whether China’s Huawei Technologies Co. should be allowed to develop Canada’s fifth-generation wireless networks. He also needs to approve or reject a massive new oil project, even as he strives to reduce the nation’s greenhouse gas emissions. Getting sign-off on the new North American free trade agreement, which he’ll tackle right away, should be easy by comparison.Trudeau’s approval rating got a bump from his handling of the Jan. 8 jet crash in Iran that killed 57 Canadians. He’ll need that goodwill as he starts his second mandate in a much more precarious position than his first. Canada’s economy slowed sharply at the end of last year, so smoothing relations with commodity hungry China will be crucial. As will getting the nation’s energy sector back on its feet after a $30 billion exodus of foreign capital.With three potential dance partners in the legislature, there’s little chance Trudeau’s Liberals will fail to ratify the new Nafta. Sealing the deal will solidify Canada’s most important trading relationship, which was upended by the election of Donald Trump -- a disruption that’s reshaped how Canada deals with global challenges.“We’re living in a world without U.S. protection,” said Stephanie Carvin, a professor at Carleton University in Ottawa and former government intelligence analyst. “I’m not sure that we’ve prepared for that.”China’s WrathTrudeau’s mettle is being tested by a bitter feud with China over Huawei, whose chief financial officer is fighting extradition to the U.S. on accusations she tricked banks into violating Iran sanctions.Beijing bristled at Canada’s detention of Meng Wanzhou at the end of 2018 while on a layover in Vancouver. China swiftly locked up two Canadians it accuses of spying and halted nearly C$5 billion ($3.8 billion) worth of agricultural imports, plunging Sino-Canadian relations into their darkest period in half a century.Trudeau, who has sought Trump’s help in the dispute to no avail, poured cold water on suggestions he halt Meng’s extradition as part of a prisoner exchange for the Canadians. “We are a country of the rule of law and we will abide by the rule of law,” the prime minister told reporters in Winnipeg, Manitoba.China is also lobbying hard for Canada to allow Huawei access to 5G. Trudeau’s new public safety minister didn’t offer any hints on the timing of a decision at last week’s cabinet retreat, but Bill Blair now says “there are a number of other significant economic and even geopolitical considerations being considered” alongside security issues.The government may be waiting to see what its allies do. While the White House is pushing for an outright ban, Boris Johnson’s government is weighing a mixed strategy that would keep the state-championed Chinese firm out of sensitive core elements of U.K. networks. “If Britain chooses to go with the regulatory approach, it will make it easier for Canada to do so,” Carvin said.Having campaigned last fall on lowering mobile-phone bills in Canada, it’ll be hard for Trudeau to order companies like BCE Inc. and Telus Corp. to rip out millions of dollars worth of existing Huawei equipment, she added.While dealing with China will occupy the bulk of Canada’s foreign policy agenda, it’s also been playing an activist role in Venezuela’s political crisis. Trudeau will host Juan Guaido in Ottawa Monday as the opposition leader tries to rekindle international support for his push to oust President Nicolas Maduro.Western WoesDomestically, the prime minister needs to reassure voters on Canada’s prairies that he hasn’t abandoned them. Key to that will be deciding on the C$20 billion Frontier oil-sands mine proposed by Teck Resources Ltd. in northern Alberta.In his first mandate, Trudeau introduced a nationwide carbon tax and overhauled the regulatory process for major energy projects. Those moves won plaudits from environmentalists but met stiff opposition from provincial premiers. During the campaign, Trudeau doubled down and committed Canada to net-zero emissions by 2050.October’s vote saw the Liberals fail to elect a single lawmaker in Alberta or Saskatchewan. “The mood has only gotten uglier and more hopeless in those western provinces,” said Shachi Kurl, executive director of the Angus Reid Institute polling firm.A Brexit-inspired separatist movement has even sprung up. While few think it could ever succeed, Trudeau overhauled his front bench to address western alienation -- promoting Chrystia Freeland to deputy prime minister with a mandate to mend federal-provincial fences.As much as Trudeau is trying to position Canada as a global leader on climate change, he also nationalized a pipeline, buying the Trans Mountain line from Kinder Morgan Inc. in 2018 for C$4.5 billion. A controversial expansion of the conduit cleared a major legal hurdle at Canada’s top court this month and construction is set to pick up this year.Increasing the flow of oil out of Alberta would be a vital boost for struggling producers, who are again facing a steep discount for their heavy crude. Teck’s mine got a tentative green light in July. The Liberals have to make a final call by the end of February, but approval from the company isn’t guaranteed given the project was conceived in a different price environment.“Politically, this is being put forward as the Trudeau government making a decision about whether or not 7,000 people are going to have jobs in Alberta” instantly, said Andrew Leach, an economist at the University of Alberta in Edmonton. “Teck has not said anything of the sort.”In confronting his domestic challenges, Trudeau might find himself seeking support from an unlikely place: the official opposition bench.“The Conservatives are obvious allies in getting Nafta through,” said Brian Topp, a former adviser to New Democratic Party leaders. “They’re also obvious allies to the government as it thinks about how to respond to the commodities crash on the prairies.”\--With assistance from Natalie Obiko Pearson and Kevin Orland.To contact the reporter on this story: Stephen Wicary in Ottawa at firstname.lastname@example.orgTo contact the editors responsible for this story: Theophilos Argitis at email@example.com, Chris FournierFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
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Teck Resources' (TECK) latest acquisition aligns with its approach to work with shareholders, in order to develop post-mining land uses ranging from wildlife habitat to economic diversification.
Canada's Teck Resources Ltd has hired Barclays to sell all of its 80% stake in its Zafranal copper asset in Peru, as the diversified miner accelerates efforts to exit advanced projects and focus on its massive Chilean expansion, two banking sources told Reuters on Wednesday. Teck is likely to sell or seek a partner for Zafranal, Chief Executive Officer Don Lindsay has said. The company and its advisors are sounding out interest from mining firms already operating in Peru for the copper-gold project that could fetch up to $500 million, one of the sources said.
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Teck Resources (TECK) possesses the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.