While there are still many who hope the Quintette mine will come back on line sometime in the near future, comments made by Tech President and CEO Donald Lindsay are not encouraging.
Lindsay has talked about the languishing coal mine during conference calls to discuss the company’s financial reports in 2018, and, while he is clear the project is still on the books for the company, it is something that is not a priority for the short term.
Late in 2018, Tech sold a stake in the Quebrada Blanca Phase 2 (QB2) Copper project in Chile, which raised the hopes of some investors that meant that Quintette—which the company has said is less a priority, timewise than QB2—would soon be coming back on stream.
However, Lindsay cautioned against people thinking Quintette would be a short term project for the company. “We are working longer term to re-balance the portfolio,” he told analysts last year. “We obviously, are a little bit overweight, steelmaking coal. Not that we don’t like the business. It’s proving to be one of the very best mining businesses in the world. We like that, and we are seeing strong demand.”
But despite the demand for coal, he says the company is trying to increase its copper business. “We’ve committed to our shareholders that growth and copper is getting the priority. And the strategy of the company is quite simple, with taking strong cash flows from coal, strong cash flows from zinc and devoting it to doubling our Copper business.”
While they have sold a portion of their stake in QB2, he says this move is designed to free up capital for other options. “We’re not going to put all of our eggs in one US$5 billion basket on QB2, because we just think it’s more prudent to diversify a bit. And that frees up as much as US$2 billion to do something else. I still think that copper would take priority for some time.”
He says the company probably won’t get around to committing that capital until mid-2019 at the earliest. “We’d want to see QB2 up and running smooth before we decided to commit capital to other growth projects, one of which could be Quintette.”
He says the company has had requests from customers in India to re-open Quintette. “I do think, at some point, that it will make sense to do so. We continue to look at it. We know there are customers that would be eager for us to bring it online, but it is not something that we see in the near term. And frankly, QB2 is still our priority for the long-term building of the company, so that’s probably where we stand.”
In December, the company approved construction of QB2, with production expected to start in late 2021. The project will open up one of the world’s largest undeveloped copper resources. The mine is expected to have low operating costs, and an initial mine life of 28 years, with “significant potential” for further growth.
