The Quintette steelmaking coal mine has been on care and maintenance since 2000. (Image courtesy of Teck Resources.)
Teck Resources (TSX: TECK.A | TECK.B) (NYSE: TECK), Canada’s largest diversified miner, has reached a deal to sell its closed Quintette steelmaking coal mine to Conuma Resources for $120 million cash.
The asset, in northeast British Columbia, has been shuttered since 2000, after being in operations for 18 years.
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Teck said Conuma Resources, a Canadian a steelmaking coal producer, will also pay an ongoing 25% net profits interest royalty once it recovers its investment in Quintette.
The Vancouver-based miner is using strong cash flows from its coal business to expand its copper development, including the Quebrada Blanca Phase 2 (Q2) expansion project in Chile.
Once in operation, Q2 would double Teck’s copper production, extending Quebrada Blanca’s life by 28 years and boosting production to 300,000 tonnes of copper a year from 287,000 tonnes in 2017.
Major steelmakers are starting to move away from coking coal used in blast furnaces and switching to greener alternatives, such as hydrogen.
The International Energy Agency published a report in November that shows “hydrogen-based steelmaking has picked up significant momentum”. According to the agency, the number of steelmakers’ announcements to use such technology tripled over the prior 12 months.
According to the World Steel Association, the industry is responsible for between 7% and 9% of the global emissions created from the burning of fossil fuels.
