Teck Assets CEO Don Lindsay to retire after 17 years

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Teck Assets Ltd. chief government Don Lindsay introduced his retirement after 17 years on the helm of certainly one of Canada’s main mining corporations.

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Throughout Lindsay’s tenure, Teck delivered “file monetary and operational outcomes and returned vital capital to shareholders,” the Vancouver-based firm mentioned in a press launch on July 26. Underneath Lindsay, who was appointed CEO in 2005, the diversified miner additionally constructed a robust copper pipeline and marked the beginning of its ambition to rebalance its portfolio in direction of metals versus coal and oilsands operations.

“Numerous planning and preparation have all led up up to now,” Lindsay mentioned on the corporate’s quarterly convention name with analysts on July 27.

“We’re reshaping our portfolio to have a much bigger give attention to copper and fewer on carbon and with that shift it will be significant…that the technique is owned and led by the CEO who shall be round and I clearly wasn’t going to be the one,” added Lindsay, who shall be turning 64 this 12 months.

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Lindsay shall be going out on a excessive notice. Teck reported that web revenue attributable to shareholders for the quarter surged to $1.68 billion, or $3.07 per diluted share, in contrast with $260 million, or 48 cents per share, in the identical quarter final 12 months.

The adjusted revenue attributable to shareholders was $1.7 billion, or $3.25 per diluted share within the quarter, in comparison with $339 million, or 63 cents per share, in the identical interval in 2021.

Teck is “on a really sturdy footing as we handle via inflationary pressures and a slowdown within the international economic system,” Lindsay mentioned within the press launch. Teck shares rose about two per cent in Toronto, to about $35, though they remained roughly 40 per cent beneath their 2022 peak of about $57 within the first week of June.

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Jonathan Worth, at present the corporate’s CFO, will ascend to CEO, whereas Harry Conger, Teck’s government vice-president and COO, will inherit Lindsay’s duties as president. The executives mentioned they purpose to proceed Teck’s technique of boosting its copper assets and different important metals within the coming years.

Teck, which hopes to realize its net-zero scope 2 emissions by 2025, at present runs no less than 4 steelmaking coal operations in British Columbia and holds a 21.3 per cent stake within the Fort Hills Vitality oilsands operation in Alberta, aside from a few copper and zinc mines. Its coal operations contributed greater than half of its complete revenues within the first quarter of this 12 months.

Nonetheless, the corporate is regularly shifting its focus in direction of copper, a metallic that’s essential for the world to satisfy its decarbonization objectives by 2050, and goals to have 4 initiatives in manufacturing by 2026.

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By way of its Quebrada Blanca section 2 (QB2) undertaking in Chile, which continues to be beneath development and is predicted to start out producing by the top of 2022, Teck hopes to double its copper manufacturing.

Lindsay mentioned Teck was “useful resource challenged” when he joined the corporate in January 2005, and he spent his early years making an attempt to ship key acquisitions. A kind of was the Quebrada Blanca deposit, the oxidized high layer of which was mined out by 2018.

With QB2, Teck shall be going beneath the deposit to extract the remaining copper. It represents the corporate’s greatest undertaking, and can embody constructing infrastructure starting from a concentrator to 150-kilometre lengthy pipelines.

Teck has spent greater than 15 years growing its QB initiatives, and Lindsay mentioned these sorts of long-term commitments may turn out to be rarer sooner or later, because it’s getting “more durable and more durable to construct something anyplace” as a consequence of stricter insurance policies and the shortage of curiosity from financiers in long-term ventures.

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Nonetheless, he mentioned that the “highest ranges of presidency” have realized the significance of crucial metals on account of the provision crunch created by the pandemic and Russia’s invasion of Ukraine.

“Fairly vital shift in Ottawa…however that takes a very long time to have an impact,” mentioned Lindsay, who will proceed as Teck’s government vice-chairman till the second quarter of 2023.

Financial institution of Montreal analyst Jackie Przybylowski, who follows Teck, described Lindsay’s retirement as “surprising,” however “not a shock within the better context.”

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“We had assumed that Mr. Lindsay would stay within the submit till completion of QB2 — and he’ll in some capability,” Przybylowski wrote in a analysis notice to shoppers on July 26.

“In our view, the announcement is seen as a unfavorable given the success Teck has loved by way of QB2 undertaking execution… and the shareholder-friendly capital returns. Traders are additionally usually cautious of administration modifications within the brief time period till the brand new CEO is acquainted to traders,” she added.

Financial institution of Nova Scotia analyst Orest Wowkodaw echoed the sentiment. “We didn’t anticipate the near-term departure of Mr. Lindsay,” he mentioned in a notice.

Teck additionally supplied an replace on the development of its QB2 undertaking, the place about 13,000 staff are employed and mentioned that its capital value steering for COVID-19 impacts elevated to US$1.4 to US$1.5 billion, from US$900 million to US$1.1 billion as a consequence of absenteeism and inflation on labour prices.

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In consequence, the corporate mentioned that manufacturing at QB2 is perhaps pushed to January 2023, versus its present goal of the fourth quarter of this 12 months.

The corporate, which additionally launched its second quarter outcomes, reported a five-fold enhance in its adjusted fundamental earnings per share to $3.30, in contrast with 64 cents in the identical quarter final 12 months.

Whereas it met its quarterly targets for copper and zinc, Teck’s manufacturing of steelmaking coal fell to five.3 million tonnes from 6.4 million tonnes within the second quarter final 12 months. It additionally diminished its yearly manufacturing steering for the commodity by one to 1.5 million tonnes — the brand new steering is 23.5 to 24 million tonnes — as a consequence of plant reliability and workforce challenges within the first half of 2022.

The miner additionally elevated the 12 months’s value steering for coal by about seven per cent to $130 – $138 per tonne largely as a consequence of a 75% enhance within the value of diesel in comparison with the identical interval final 12 months.

• Electronic mail: nkarim@postmedia.com | Twitter: naimonthefield

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