Teck Resources Navigates Geopolitical Crosscurrents with Strategic Shifts in US Operations

The mining giant Teck Resources (NYSE: TECK) is reportedly in talks to reroute output from its U.S. operations away from China, according to Bloomberg News. This strategic move underscores the company’s evolving approach to managing geopolitical risks and capitalizing on the global shift toward energy transition metals. With its Red Dog zinc mine in Alaska facing declining grades and operational headwinds, and its copper projects gaining momentum, Teck is positioning itself to thrive in a world where supply chains are increasingly scrutinized. Here’s what investors need to know.

The US Operations Crossroads: Zinc Declines, Copper Rises

Teck’s Red Dog Mine, one of the world’s largest zinc producers, is confronting a decline in ore grades as it transitions between pits. 2025 zinc production is expected to drop to 430,000–470,000 tonnes, a 15% slide from 2024 levels. To extend the mine’s life beyond 2028, Teck is constructing an all-season access road to reach deeper deposits at Anarraaq and Aktigiruq. This $135–150 million investment highlights the mine’s strategic importance, even as its output wanes.

But Teck’s future lies not in zinc alone. The company has pivoted aggressively toward copper—a cornerstone of the energy transition. By selling its steelmaking coal business to Glencore for $7.3 billion in 2024, Teck freed up capital to fund projects like Quebrada Blanca (QB) in Chile, which produced 207,800 tonnes of copper in 2024. 2025 guidance for QB is 230,000–270,000 tonnes, though operational delays in Q1 have cast a shadow over its ramp-up.

Why Reroute from China? Market Diversification and Trade Risks

The Bloomberg report suggests Teck is exploring alternative markets for its U.S. output, likely to mitigate reliance on China. While China accounts for less than 20% of Red Dog’s zinc concentrate sales, geopolitical tensions and tariffs have prompted a push for diversification. The company’s Q1 results highlighted $193 million in zinc gross profit, driven by strong sales to Asia and Europe. By rerouting to these markets, Teck could avoid U.S.-China trade barriers affecting refined metals, such as those covered under the USMCA agreement.

Financial Fortitude and Shareholder Returns

Teck’s balance sheet is a key strength. With $5.8 billion in cash and $10 billion in total liquidity, the company has the flexibility to fund growth while returning capital to shareholders. In Q1, it repurchased $505 million in shares, leaving $1.5 billion remaining under its $3.25 billion buyback program. Adjusted EBITDA surged to $927 million, more than double 2024’s figure, fueled by higher copper and zinc prices.

The Copper Pivot: Risks and Rewards

Teck’s copper projects are its crown jewels. The Highland Valley Copper Mine Life Extension (MLE) and Zafranal (Peru) could add 126,000 tonnes/year of copper by the mid-2030s. However, QB’s operational challenges—such as a January maintenance shutdown and Chilean power outages—have delayed its full potential. 2025 copper unit costs are now projected to hit the upper end of $1.80–$2.15/lb, a risk if prices dip further.

Conclusion: Positioning for Long-Term Value

Teck Resources is at a crossroads. Its zinc decline is undeniable, but its copper ambitions—backed by $3.2–3.9 billion in capital spending—are transformative. The rerouting discussions with China reflect a broader strategy to insulate supply chains from geopolitical volatility while capitalizing on the energy transition’s demand for critical minerals.

With $10 billion in liquidity, a shareholder-friendly capital allocation policy, and projects like QB and Highland Valley MLE nearing key milestones, Teck is well-positioned to deliver growth. However, execution risks—especially at QB—remain. Investors should monitor copper prices (currently ~$2.50/lb) and QB’s tailings management progress. If Teck can navigate these hurdles, its pivot to energy transition metals could pay off handsomely.

As the world’s green energy revolution accelerates, Teck’s focus on copper and cost discipline may just make it a standout player in the mining sector’s next chapter.