Teck Shrugs Off Tariff Risks, While Cameco Says 'It's Kind Of Econ 101' For Uranium Prices

Teck Resources Ltd. (TSX: TECK.A, TECK.B) and Cameco Corporation (TSX: CCO, NYSE: CCJ) have been making headlines recently, with Teck's resilience against U.S. tariffs and Cameco's insights into uranium prices. Let's delve into how these two companies are navigating the market landscape.

Teck Resources: Diversification and Resilience

Teck Resources, a Canadian mining company, has been focusing on copper growth and debt reduction strategies, making it more resilient against potential U.S. tariffs. With only about 15% of its revenues coming from refined zinc, lead, and specialty metals exports to the U.S., Teck's business is less dependent on U.S. exports. The company's management is committed to returning $1.8 billion to shareholders through buybacks and dividends in 2024, which is not directly affected by the proposed 25% tariff on Canadian goods.

Teck's focus on copper growth, following the sale of its steelmaking coal business to Glencore, further contributes to its resilience. The company's exports mainly go to Asia and Europe, allowing it to adjust trade flows in the event of tariffs being imposed. Teck's CEO, Jonathan Price, stated during an earnings call that the company has a resilient business driven by the diversification of its products and operations.



Cameco: Uranium Prices and Strategic Investments

Cameco, a uranium miner and nuclear fuel supplier, has been benefiting from the resurgence of nuclear power as a reliable and sustainable energy source. The company's president and CEO, Tim Gitzel, recently stated that the outlook for nuclear power and nuclear fuel fundamentals is more favorable than it has been for decades. Cameco believes that the risks to uranium and nuclear fuel supplies and services are greater than the risks to demand, which will create a renewed focus on ensuring long-term availability of nuclear fuel supplies.

Cameco's strategy of full-cycle value capture has allowed it to be resilient and selective in its contracting discussions, retaining exposure to the improving demand from its customers. The company has a large and growing pipeline of uranium business under negotiation and continues to negotiate off-market contracts and selectively add to its long-term portfolio, which now totals approximately 220 million pounds.



Conclusion

Teck Resources' diversification strategy and focus on copper growth have made it resilient against potential U.S. tariffs, while Cameco's strategic investments in uranium and nuclear fuel services have positioned it to benefit from the growing demand for nuclear power. Both companies have demonstrated their ability to navigate market challenges and capitalize on opportunities, making them attractive investments in their respective sectors.