Teck Resources Limited (TECK): Business Model Canvas [10-2024 Updated]

Teck Resources Limited (TECK) operates within the dynamic mining sector, primarily focusing on the extraction and production of copper and zinc. This blog post delves into the company's Business Model Canvas, highlighting its strategic partnerships, key activities, and robust value propositions. Discover how Teck balances sustainability with profitability while catering to various customer segments, from industrial manufacturers to investors seeking strong returns. Read on to explore the intricate components that drive Teck's business success.

Teck Resources Limited (TECK) - Business Model: Key Partnerships

Joint ventures with BHP, Glencore, Mitsubishi

Teck Resources Limited engages in several significant joint ventures, notably with BHP, Glencore, and Mitsubishi. The most prominent of these is the Antamina mine in Peru, a partnership where Teck holds a 22.5% interest. In 2024, Antamina produced approximately 763,000 tonnes of copper, contributing significantly to Teck's copper output.

Teck completed the sale of its remaining 77% interest in its steelmaking coal business to Glencore, resulting in transaction proceeds of US$7.3 billion. This sale is part of Teck's strategy to focus on energy transition metals and improve its capital structure.

Collaborations with local governments

Teck maintains collaborative relationships with local governments to facilitate its operations and development projects. These partnerships are essential for navigating regulatory frameworks and securing necessary permits. In 2024, Teck's operations in Chile and Canada benefited from supportive local government policies aimed at promoting sustainable mining practices.

Teck has also engaged in community initiatives, which are crucial for gaining social license to operate and enhancing its reputation among local stakeholders. For instance, the company has invested in local infrastructure and education programs, which align with its commitment to corporate social responsibility.

Partnerships with technology providers for operational efficiency

Teck is actively pursuing partnerships with technology providers to enhance operational efficiency and reduce environmental impact. The company has implemented advanced technologies in its mining processes, such as automation and data analytics, to optimize production and improve safety. In 2024, Teck's investment in technology is expected to yield a reduction in operational costs, with copper net cash unit costs projected between US$1.90 and US$2.30 per pound.

Additionally, Teck's focus on sustainability has led to collaborations with tech companies specializing in green technologies, aiming to minimize the carbon footprint of its operations. This strategic alignment is part of Teck's broader goal to transition to a pure-play energy transition metals company.

Partnership Type	Partner	Contribution/Impact
Joint Venture	BHP	22.5% interest in Antamina; 763,000 tonnes of copper produced in 2024
Joint Venture	Glencore	Sale of steelmaking coal business for US$7.3 billion
Collaboration	Local Governments	Support for sustainable mining practices; community initiatives
Technology Partnership	Various Tech Providers	Advanced technologies for operational efficiency; projected cost reductions

Teck Resources Limited (TECK) - Business Model: Key Activities

Mining and production of copper and zinc

Teck Resources Limited has established itself as a leading producer of copper and zinc, key components in various industrial applications. In Q3 2024, Teck achieved a record copper production of 114,500 tonnes, with 52,500 tonnes specifically from the Quebrada Blanca (QB) mine. The company anticipates reaching full throughput rates at QB by the end of 2024, which is crucial for scaling production capabilities.

In terms of zinc production, Teck reported an increase of 14% year-over-year, totaling 142,500 tonnes for Q3 2024. This growth is indicative of Teck's operational efficiency and strategic focus on enhancing production levels across its mining sites.

Environmental compliance and sustainability initiatives

Teck is committed to environmental compliance and sustainability, focusing on minimizing its ecological footprint. The company has implemented various initiatives aimed at reducing greenhouse gas emissions and managing water resources effectively. For Q3 2024, Teck reported environmental costs of $15 million, reflecting its ongoing investment in sustainable practices.

Additionally, Teck's High-Potential Incident (HPI) Frequency rate improved by 33%, indicating a significant reduction in safety incidents at its operations. This focus on health and safety is critical for maintaining operational integrity and compliance with regulatory standards.

Exploration and development of new mining projects

Teck is actively engaged in the exploration and development of new mining projects to sustain its growth trajectory. The company’s updated production guidance for 2024 includes copper production expectations of 420,000 to 455,000 tonnes and zinc production of 565,000 to 630,000 tonnes. The company is also focusing on advancing its near-term projects for potential sanctioning in 2025.

The successful completion of the sale of its steelmaking coal business for US$7.3 billion has provided Teck with additional capital to invest in these growth initiatives. This strategic shift positions Teck to enhance its portfolio in energy transition metals, aligning with global trends towards sustainable resource development.

Key Metrics	Q3 2024	Q3 2023
Copper Production (tonnes)	114,500	Unknown
Zinc Production (tonnes)	142,500	125,000
Environmental Costs (CAD$ million)	15	Unknown
HPI Frequency Rate Improvement (%)	33%	Unknown
2024 Copper Production Guidance (tonnes)	420,000 - 455,000	Unknown
2024 Zinc Production Guidance (tonnes)	565,000 - 630,000	Unknown
Sale of Steelmaking Coal Business (USD)	7.3 billion	Unknown

Teck Resources Limited (TECK) - Business Model: Key Resources

Mining facilities in North and South America

Teck Resources operates several key mining facilities across North and South America, focusing on copper, zinc, and other base metals. The major operations include:

• Quebrada Blanca (QB) in Chile, which is ramping up production.
• Highland Valley Copper in Canada.
• Antamina in Peru, a joint venture with BHP, Glencore, and Mitsubishi.
• Red Dog Mine in Alaska, one of the largest zinc mines in the world.

As of Q3 2024, Teck achieved a record copper production of 114,500 tonnes, with 52,500 tonnes coming from QB.

Skilled workforce with mining expertise

Teck employs a highly skilled workforce, particularly in the fields of mining operations, engineering, and environmental management. The company emphasizes health and safety, reporting a High-Potential Incident (HPI) Frequency rate of 0.10 in Q3 2024, which reflects a 33% reduction compared to the same period last year.

Furthermore, Teck was recognized on Forbes' list of the World’s Best Employers in 2024, highlighting its commitment to employee satisfaction and development.

Strong financial liquidity, with $11.9 billion available as of October 2024

As of October 23, 2024, Teck Resources reported a strong liquidity position of $11.9 billion, which includes $7.8 billion in cash. The financial metrics for Q3 2024 include:

Financial Metric	Q3 2024 (CAD$ millions)	Q3 2023 (CAD$ millions)
Revenue	$2,858	$1,989
Gross Profit	$478	$261
Adjusted EBITDA	$986	$417
Profit (loss) from continuing operations	$(759)	$48
Adjusted profit from continuing operations attributable to shareholders	$314	$85

Teck's ability to generate cash flows from operations, totaling $134 million in Q3 2024, underlines its robust financial health.

Teck Resources Limited (TECK) - Business Model: Value Propositions

High-quality copper and zinc production

Teck Resources Limited has established itself as a leading producer of copper and zinc, with significant output levels. In Q3 2024, Teck achieved a record copper production of 114,500 tonnes, with 52,500 tonnes coming from the Quebrada Blanca (QB) operation. The company anticipates annual copper production in the range of 420,000 to 455,000 tonnes for 2024. In terms of zinc, production at the Red Dog mine increased by 14% to 142,500 tonnes compared to the previous year. The robust production capacity directly addresses the rising global demand for copper, crucial for energy transition technologies.

Commitment to sustainable mining practices

Teck is committed to sustainable mining practices, which are integral to its value proposition. The company emphasizes reducing its environmental footprint and enhancing safety measures. In Q3 2024, Teck's High-Potential Incident (HPI) Frequency rate remained steady at 0.10, representing a 33% reduction compared to the same period last year. The company’s operational strategy includes transitioning to a pure-play energy transition metals company, focusing on the copper sector while maintaining a strong commitment to environmental stewardship. Teck's initiatives in sustainability not only align with regulatory requirements but also cater to the increasing consumer preference for responsibly sourced materials.

Strong return on investment for shareholders

Teck Resources has demonstrated a strong commitment to delivering value to its shareholders. In Q3 2024, the company returned over $1.3 billion to shareholders through share buybacks and dividends. The company executed a total return of $720 million in Q3 alone, comprising $398 million in share repurchases and $322 million in dividends. Adjusted profit from continuing operations attributable to shareholders reached $314 million or $0.61 per share. This financial performance underscores Teck's ability to generate cash flows and provide lucrative returns, reinforcing investor confidence in the company’s growth trajectory.

Metric	Q3 2024	Q3 2023
Copper Production (tonnes)	114,500	Not specified
Zinc Production (tonnes)	142,500	125,000
Shareholder Returns (CAD$ in millions)	720	Not specified
Adjusted Profit (CAD$ in millions)	314	85
Basic Earnings per Share (CAD$)	(1.45)	(0.09)

Teck Resources Limited (TECK) - Business Model: Customer Relationships

Direct sales to industrial manufacturers

Teck Resources Limited engages in direct sales to various industrial manufacturers, particularly in the copper and zinc sectors. In Q3 2024, Teck reported revenue of CAD $2,858 million, a significant increase from CAD $1,989 million in Q3 2023. This revenue growth was driven primarily by strong demand from industrial customers, particularly in the construction and automotive sectors, where copper is a key material.

Long-term contracts with major customers

Teck has established long-term contracts with major customers to ensure stable revenue streams. For instance, the company has agreements with large manufacturers that allow for predictable pricing and supply. In 2024, Teck's adjusted EBITDA reached CAD $986 million, up from CAD $417 million in the same quarter the previous year, indicating the effectiveness of these long-term partnerships in maintaining profitability amid fluctuating market conditions.

Contract Type	Major Customers	Duration	Volume (tonnes)	Price (CAD per tonne)
Long-term supply	Automotive manufacturers	5 years	150,000	2,500
Long-term supply	Construction companies	10 years	300,000	2,300
Long-term supply	Electronics manufacturers	3 years	100,000	2,700

Active engagement with local communities

Teck Resources is committed to active engagement with local communities surrounding its operations. This includes investments in community development and sustainability initiatives. In 2024, Teck allocated CAD $100 million towards community programs, focusing on education, health, and environmental stewardship, thereby fostering goodwill and enhancing its reputation among local stakeholders.

Furthermore, Teck’s High-Potential Incident (HPI) Frequency rate remained steady at 0.10 in Q3 2024, reflecting strong safety practices that are a key concern for local communities. The company’s proactive measures in community engagement help build trust and ensure social license to operate.

Teck Resources Limited (TECK) - Business Model: Channels

Direct sales through contracts with manufacturers

Teck Resources Limited primarily engages in direct sales through long-term contracts with manufacturers for its metal products, especially copper and zinc. In Q3 2024, Teck reported revenues of $2.858 billion, reflecting a significant increase from $1.989 billion in Q3 2023, driven largely by robust demand for copper and zinc.

The company has established strategic relationships with various manufacturers, ensuring stable demand and long-term contracts that provide predictability in revenue streams. In 2024, Teck anticipates annual copper production between 420,000 to 455,000 tonnes, which will primarily serve its direct customers.

Distribution via third-party logistics partners

Teck utilizes third-party logistics partners to facilitate the distribution of its products globally. This network enables efficient transportation and delivery of copper and zinc products to various markets, ensuring that Teck can meet customer demands promptly. In Q3 2024, Teck reported a net cash unit cost for copper between $1.90 to $2.30 per pound, which reflects the operational efficiency achieved through its logistics partners.

The company’s strategic logistics partnerships have been critical in managing supply chain challenges, particularly in the face of fluctuating commodity prices and demand. The logistics network also supports Teck's commitment to sustainability by optimizing transportation routes and reducing carbon footprints associated with product delivery.

Online investor relations and communications

Teck maintains a strong online presence to engage with investors and stakeholders. The company’s investor relations website provides comprehensive information, including financial reports, press releases, and updates on operational performance. In 2024, Teck returned over $1.3 billion to shareholders through share buybacks and dividends, showcasing its commitment to enhancing shareholder value.

Teck also hosts regular investor conference calls and webcasts to discuss financial results and strategic initiatives. For instance, the Q3 2024 financial results call is scheduled for October 24, 2024, allowing investors to engage directly with management.

Channel	Description	Key Metrics
Direct Sales	Long-term contracts with manufacturers	Q3 2024 Revenue: $2.858 billion
Third-party Logistics	Distribution network for global product delivery	Copper net cash unit costs: $1.90 - $2.30 per pound
Online Communications	Investor relations and stakeholder engagement	Shareholder returns: over $1.3 billion in 2024

Teck Resources Limited (TECK) - Business Model: Customer Segments

Industrial manufacturers of electrical components

Teck Resources Limited supplies various metals essential for the production of electrical components, including copper and zinc. In Q3 2024, Teck reported copper production of 114,500 tonnes, with an average price of US$4.18 per pound during the quarter. The strong demand for copper, driven by the renewable energy sector and electric vehicle manufacturing, positions Teck as a key supplier to industrial manufacturers.

Metric	Q3 2024	Q3 2023
Copper Production (tonnes)	114,500	51,300
Copper Average Price (US$/lb)	4.18	3.90

Construction companies requiring metals

Construction companies are significant customers for Teck, particularly for zinc and copper. The construction sector's recovery post-pandemic has led to increased demand for construction materials, with Teck's Red Dog operations reporting a 14% increase in zinc production year-over-year, totaling 142,500 tonnes in Q3 2024. This growth reflects the sector's need for robust materials to support infrastructure projects.

Metric	Q3 2024	Q3 2023
Zinc Production (tonnes)	142,500	125,000
Zinc Average Price (US$/lb)	1.25	1.15

Investors and shareholders looking for returns

Teck has actively engaged with investors and shareholders, returning over $1.3 billion through share buybacks and dividends from January 1 to October 23, 2024. The company announced a supplemental dividend of $0.50 per share, reflecting its commitment to providing attractive returns amid strong operational performance. In Q3 2024, adjusted profit from continuing operations attributable to shareholders was $314 million, or $0.61 per share.

Metric	Q3 2024	Q3 2023
Adjusted Profit (CAD$ millions)	314	85
Dividends Returned (CAD$ millions)	322	200

Teck Resources Limited (TECK) - Business Model: Cost Structure

Operational costs related to mining and production

Teck Resources Limited incurs significant operational costs associated with its mining and production activities. For the third quarter of 2024, the company reported adjusted EBITDA of $986 million, driven by record copper production. However, the profit from continuing operations before taxes was a loss of $759 million, primarily due to an impairment charge at its Trail Operations.

In terms of production, Teck achieved a copper output of 114,500 tonnes in Q3 2024, reflecting a ramp-up in production at its Quebrada Blanca (QB) project. The cost structure includes:

• Net cash unit costs for copper between US$1.90 and $2.30 per pound.
• Net cash unit costs for zinc projected between US$0.45 and $0.55 per pound.

Additionally, the company reported gross profit before depreciation and amortization of $962 million for Q3 2024.

Environmental compliance costs

Environmental compliance remains a critical component of Teck's cost structure. In Q3 2024, environmental costs amounted to $15 million, reflecting the company’s commitment to sustainable operations. These costs are associated with:

• Monitoring and mitigation of environmental impacts at mining sites.
• Investment in technologies to reduce emissions and improve waste management.
• Compliance with regulatory requirements across different jurisdictions.

The company anticipates ongoing expenses related to environmental initiatives as part of its operational strategy.

Costs associated with workforce management and training

Teck Resources places a strong emphasis on workforce management and training, which is essential for maintaining operational efficiency and safety standards. For Q3 2024, share-based compensation costs were reported at $26 million. Key components of workforce-related costs include:

• Training programs to enhance skills and safety awareness among employees.
• Recruitment and retention strategies to attract skilled labor, especially in remote locations.
• Employee benefits and compensation packages that align with industry standards to ensure workforce stability.

The company's focus on minimizing operational disruptions through effective workforce management is evident in its safety metrics, with a High-Potential Incident Frequency rate of 0.10, reflecting a 33% reduction compared to the same period last year.

Cost Category	Q3 2024 Amount (CAD$ millions)	Notes
Operational Costs	$986 (Adjusted EBITDA)	Driven by copper production ramp-up
Environmental Compliance Costs	$15	Investment in sustainability initiatives
Workforce Management Costs	$26 (Share-based compensation)	Training and recruitment expenses

Teck Resources Limited (TECK) - Business Model: Revenue Streams

Sales of copper and zinc products

Teck Resources generates significant revenue from the sale of copper and zinc products. In the third quarter of 2024, Teck reported a total revenue of $2.858 billion, a notable increase from $1.989 billion in the same quarter of 2023. This increase is attributed to record copper production and strong pricing in the market.

In Q3 2024, Teck achieved a copper production of 114,500 tonnes, with 52,500 tonnes coming from the Quebrada Blanca operation. The average copper price during this period was US$4.18 per pound, closing at US$4.43 per pound, which contributed approximately $103 million in positive pricing adjustments.

For zinc, the Red Dog mine produced 142,500 tonnes in Q3 2024, reflecting a 14% increase year-over-year. This strong performance is crucial as zinc prices also remain robust.

Product	Q3 2024 Production (tonnes)	Q3 2023 Production (tonnes)	Average Price (US$ per pound)
Copper	114,500	Not specified	$4.18
Zinc	142,500	Not specified	Not specified

Dividends and shareholder returns from profits

Teck Resources has a strong commitment to returning value to its shareholders. In Q3 2024, the company returned a total of $720 million to shareholders. This included $398 million for share buybacks and $322 million in dividends, which comprised the regular quarterly dividend and a supplemental dividend of $0.50 per share, totaling $257 million.

From January 1 to October 23, 2024, Teck returned over $1.3 billion to shareholders through a combination of share buybacks and dividends, reflecting its robust cash flow and commitment to shareholder value.

Revenue from joint ventures and partnerships

Teck Resources also generates revenue through joint ventures and partnerships, particularly notable is its stake in the Antamina mine, a joint venture with BHP, Glencore, and Mitsubishi. The operations at Antamina contribute significantly to Teck’s overall production and revenue, particularly in copper and zinc.

In 2024, Teck completed the sale of its remaining 77% interest in its steelmaking coal business, generating cash proceeds of US$7.3 billion. These funds are being utilized for shareholder returns and debt reduction.

Joint Venture	Partner(s)	Revenue Contribution (if available)
Antamina	BHP, Glencore, Mitsubishi	Not specified
Steelmaking Coal Business Sale	Glencore	US$7.3 billion

Article updated on 8 Nov 2024

Resources:

1. Teck Resources Limited (TECK) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Teck Resources Limited (TECK)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Teck Resources Limited (TECK)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.