With the aim of rebalancing its portfolio towards metals needed for the world’s energy transition, Teck Resources (TSX: TECK.A/TECK.B; NYSE: TECK) will look to finish building its biggest ever project, the Quebrada Blanca phase 2 (QB2) in Chile, by the end of 2022 and double its copper production.  

In an interview with The Northern Miner, Teck’s COO Red Conger said the project, which had initially faced stoppages due to the Covid-19 pandemic, is nearly 85% complete and described it as a “generational asset” that would be in production for decades.   

“We see this project as a huge transformation for our company,” Conger said. “It’s by far the biggest thing that we have done from a construction standpoint and one of the biggest in the industry.”   

He added: “We have a stated objective strategy to be a large copper producer over the next 10 to 15 years and we have the mineral in the ground to do that – and the team and know-how.”   

The company, which aims to achieve net-zero scope 2 emissions by 2025, currently runs four steelmaking coal operations in British Columbia and holds a 21.3% interest in the Fort Hills Energy oilsands operation in Alberta, in addition to a couple of copper and zinc mines.  

In the first quarter of 2022, its steelmaking coal operations contributed more than half ($2.7 billion) of its total revenues of $5 billion, while its copper and zinc operations constituted about $930 million and $920 million respectively.   

Located in Chile’s Región de Tarapacá, about 165 km from the region’s capital city of Iquique, QB2 will not only double Teck’s copper production, but Conger also expects it to play a crucial role in helping meet the world’s energy transition goals.  

Based on a technical report filed in 2019, the project has reserves of 1.4 billion tonnes grading 0.48% copper for 6.7 million tonnes of copper metal and is expected to produce an average of about 250,000 tonnes of copper annually during a 28-year mine life.  

“There’s been very few new copper mines developed over the last 10 to 20 years and that coupled with new uses, new demand for copper is really a good set of circumstances for the commodity,” he said. 

QB2 construction 

The Quebrada Blanca (QB) deposit’s oxidized top layer was mined by Teck until 2018. After mining ceased, the operation shifted its focus to extracting secondary copper from previous leach piles.   

With QB2, Teck aims to dig further below to the primary mineralization. In order to extract the remaining copper in the deposit, it’s building an array of infrastructure ranging from a concentrator and tailing dams to a desalinization plant and pipelines as long as 150 km.   

The project will use desalinated sea water pumped up by booster stations through one of the pipelines to the concentrator situated at an elevated altitude. Another pipeline will be used to transport the concentrate down to the port where it will be dried and loaded on to ships.   

According to Conger, construction hasn’t been impacted by rising inflation. “The world is in a high inflationary position right now, but all of the material required for this project was actually purchased before that phenomenon began so that’s been a very fortunate set of circumstances for this project,” he said.   

The rate of absenteeism, which was on the rise in the last couple of years due to the pandemic, has also “greatly reduced,” providing the project the momentum it needs to complete its key milestones this quarter.   

“We are in the process of turning on all the major energy delivery parts of the project,” Conger said. “Another big milestone we are working on right now is getting first water into the desalinization plant… we should have first water going in there this quarter.”    

Clean energy 

Teck expects to power 50% of the QB2 project through a combination of solar and wind energy.   

It is in talks with providers to secure another tranche of renewable energy to feed the project’s electrical needs in the future, which is in line with its goal of reducing carbon intensity from its operations by 33% by 2030.   

While Teck views the Quebrada project as one that would contribute to the world’s increasing demand for clean energy, it did find itself in trouble in April when Chile’s environmental regulator, the Superintendency of the Environment (SMA), filed charges against the company, claiming that it had failed to comply with measures to avoid impacts to vegetation and animals on its QB property.  

The SMA said that Teck has provided a response that includes making investments to correct the issues and comply with the regulations and that it would be monitoring the situation. 

Conger doesn’t expect Teck to face any environment-related issues in the future. “We work closely with the regulators, we have made a variety of adjustments as we have learned things on the ground,” he said. He added that the company works actively every day to ensure that it doesn’t “inadvertently” do any kind of harm.   

Aside from aiming to start producing at QB2 by the end of this year, Teck is also expecting to complete studies on a possible expansion of the QB mill by the end of this year. This will increase the milling capacity by 50%, said Conger.   

“We have done engineering now that proves that all that infrastructure with only minor modifications can accommodate that increase in production. So, all we really need to do is add one SAG mill, two ball mills and another row of flotation and we can achieve a 50% increase in capacity,” he said.   

While Teck is currently involved in developing a number of copper projects including Zafranal in Peru, for which a feasibility study has been completed, San Nicolas in Mexico, where production is targeted for 2026 and Galore Creek in British Columbia, which is expected to witness a completed prefeasibility study by next year, QB2 is expected to be the start of a big change for the company. As Conger puts it, “This is the first big piece of putting our copper growth efforts in to place.”