TECK CORP Model Miner

By just about any measure, Teck Corp. is the model mining company of the 1980s. The foundation of the com pany’s future is its low-cost, long-life orebodies. They are the envy of the mining world, diversified both geographically and by commodity. Teck today controls or owns prime deposits of gold, zinc, copper, silver, coal, oil and gas and other minerals in Canada, the U.S. and Australia. Few other companies can claim to have put into production seven new mines since 1975 — a zinc mine in Newfoundland, a ferroalloy mine in Quebec, gold mines in Ontario and the Yukon, and a coal mine and two copper mines in British Columbia. Fewer still have the orebodies to be reasonably confident of putting into production another two or three in the next few years — the Red Dog zinc deposit and probably a couple of gold mines in Quebec.

On top of that, Teck’s financial results are consistently better than others in the mining industry. In 1986, for example, it had earnings of 44 cents per share after paying a dividend of 17.5 cents per share, increasing assets by $23 million and reducing long-term debt by $9 million.

Yet perhaps the most intriguing aspect of Teck is the corporate “culture” that has created an atmosphere where a small group of mine finders, developers and operators can fluorish.

Long considered something of a maverick in the Canadian mining community, Teck has never veered from its own path to success. President Norman Keevil Jr says the company isn’t big on such orthodox management tools as 5-year plans: “Things have a habit of changing. Any 5-year plan we would have had in the past would have been out of date after two years.” The company’s success in participating in successful mine development projects “follows from being opportunistic in the best sense of the word.”

There has been no shortage of critics as Teck proceeded in its inimitable fashion, but the company has gained respect around the world as an innovator, a discoverer, a producer and — perhaps above all — a company with integrity.

While the company’s roots extend over almost 75 years, Teck Corp. as we know it today really dates back to a copper discovery by Norman Keevil Sr at Temagami, Ont. In reality, Teck is Keevil Sr’s creation and reflects his personality — apparently casual but aggressive, proud of its achievements yet with a pervasive sense of responsibility toward its employees and those with whom it does business.

And Teck has never forgotten its roots. It appreciates the contribution juniors make to the industry and knows how senior companies — among whose ranks Teck now finds itself — can benefit from a symbiotic relationship between the two.

In fact when Teck moved its head office to Vancouver from Toronto in 1972, a prime consideration was Vancouver’s emerging status as a financing centre for junior mining companies, Keevil Jr says. Teck wanted to be where the action was. Today Vancouver juniors view Teck as one of their own — a company that has been part of their community over the long haul, not just for the flow-through money of the 1980s.

But with increased success comes increased responsibilities — and headaches. For example, although not directly involved in a lawsuit between Lac Minerals and International Corona Resources, Teck stands to gain a great deal if Corona, its 50% partner in Hemlo, is successful. Keevil Jr says a favorable decision is not part of the company’s plans. “But our expectations include it.”

And in British Columbia’s Highland Valley, Teck is still trying to muscle its way into a new company. Highland Valley Copper was formed in 1986 when Cominco and Lornex Mining pooled their Highland Valley resources — Cominco’s orebody and Lornex’s mill. Teck, which owned 23% of Lornex, wanted its nearby Highmont mill to be part of that reorganization. In fact Keevil Jr says Teck had an agreement with the other two that it would be included.

“January 13, 1986, is a date that’s marked indelibly in my mind because it was quite a shock,” says Keevil, referring to the day Lornex and Cominco announced their plans. “Lornex broke ranks.”

There’s a possibility the matter could end up before the courts, but Keevil says a negotiated settlement would be preferable. Now that Teck has taken a control position in Cominco, it’s hand is considerably strengthened.

Concerning the Cominco acquisition itself, Keevil says the only major change has been the installation as President of Robert Hallbauer, formerly a senior vice-president at Teck. Plans are to reduce debt to $300 million by the end of 1987 from about $1 billion at the end of 1985.

It may not have any changes in store for Cominco, but it’s unlikely that Teck will go for long without creating some new headlines. It has a tradition of breaking new ground. The real news would be if Teck provided no more surprises.