Teck Resources (TECK) Q3 2026 earnings review
Record copper doubles Teck's profit, but its biggest mine slows
Record copper prices lifted Teck's profit and cash while its biggest mine lost ground to the weather. Profit before interest, tax and depreciation nearly doubled to $2.3 billion, and mining a pound of copper cost US$1.77, down from a year ago. Chief executive Jonathan Price credited production, costs and prices; by our math price explains most of the gain. Quebrada Blanca produced 15% less than in the spring after storms cut its power.
| Profit before interest, tax and depreciation, excluding one-offs | $2.3 billion +97% from a year ago |
|---|---|
| Cost to mine a pound of copper, after by-product credits | US$1.77 US$2.09 a year ago |
| Net cash | $1.9 billion $150 million at year-end |
| Full-year copper cost outlook | Lowered to US$1.80–2.00 US$1.85–2.20 before |
⚖️ Verdict: 🟢 Bullish
The story got better because Teck now earns more on every pound at any copper price: costs fell, smelters pay to take its concentrate, and the company lowered its full-year cost plan for both metals. The bad news: QB works from a single mining phase, and by our math the plan leaves about 101,000 tonnes of copper for the fourth quarter, with a strike at Highland Valley on top.
The question now is whether QB's weak quarter was the weather or the ore. If recovery climbs back above 83% as more mining faces open, the plan holds; if it stays near 81%, the grades were too hopeful. QB's fourth-quarter output and recovery, due in February, will tell.
🐂 Bull Case
Record Copper Prices Did Most of the Work
Teck sells copper and zinc at whatever price the metal exchanges set, so its profit moves with those prices. Chief executive Jonathan Price said the quarter showed "increased production, disciplined execution and record copper prices driving strong financial performance and cash generation". Of those three, price did most of the lifting.
The copper segment's gross profit rose by $868 million from a year ago. By our math the higher copper price supplied $664 million of that, three-quarters of the gain, and the rest came from volumes, cheaper smelting and lower operating costs.
- Realized copper price: US$6.41 a pound, up 44% from a year ago
- Price effect on copper gross profit: $664 million of an $868 million gain
- Volumes plus lower smelter charges: $76 million
- Lower unit operating costs: $62 million
- Pricing adjustments on sales booked earlier: a $202 million gain before tax
This matters because price can reverse while mines cannot. Sales still open at quarter end were valued at US$6.55 a pound, above the quarter's average, so a fall in copper would turn this quarter's pricing gain into a loss. Teck's own table puts each cent on the copper price at $14 million of annual cash profit.
What to watch: the settlement pricing line in the fourth quarter, reported inside other operating income. A loss there would mean the copper price has turned, and the year-on-year profit gains would shrink with it.
Lower Copper Costs, and a Lower Full-Year Plan
Net cash unit cost is what a pound of copper costs Teck to mine and ship after credits for the silver, molybdenum and zinc dug up alongside it. It fell to US$1.77 from US$2.09 a year ago, and the company lowered its full-year ranges for both copper and zinc.
- Copper net cash unit cost: US$1.77 a pound, down 15% from a year ago
- Smelter processing charges: a credit of US$0.14 a pound, from zero, because smelters now pay to get concentrate
- By-product credits: US$0.52 a pound, down from US$0.60 as Antamina mined less zinc
- Full-year copper cost range: US$1.80–2.00, from US$1.85–2.20
- Full-year zinc cost range: US$0.30–0.40, from US$0.65–0.75
Most of the improvement comes from outside Teck's control. Chinese smelters are short of concentrate, so they pay miners rather than charge them. The new plan assumes silver at US$65 an ounce where the old one used US$36, so cheaper silver would push costs back up. Diesel runs the other way: Highland Valley's operating costs rose $50 million on fuel and extra hauling.
What to watch: the smelter charge line in the fourth quarter. If it stays negative while silver holds, the year lands near the bottom of the new copper range.
Trail Smelter Earns Again, Gets Its Value Back
Trail is Teck's zinc and lead smelter in British Columbia. Two years ago the company wrote $1.1 billion off its value. Since then it changed what it feeds the plant, favouring stored residues and metal-rich concentrates over volume, and the plant made $169 million of gross profit before depreciation this quarter, triple a year earlier.
Teck reversed the whole write-down, adding $888 million before tax, citing "higher expectations for long-term commodity prices and strengthening market fundamentals for strategic metals". Germanium, a metal used in chips and fibre optics, brought in $118 million of revenue, more than double a year ago.
The write-back rests on long-term prices, not this quarter, so it matters less than the cash. The real test is the Canada Growth Fund deal, which would put up to $400 million into a plan that "could double Trail’s existing production capacity for germanium and antimony".
What to watch: a signed definitive agreement with the Canada Growth Fund, and Teck's own committed share of the plan. A signature would turn Trail from a recovered asset into a growth project.
Cash Builds Even as Highland Valley Construction Accelerates
Teck pays for a four-year, $2.1–2.4 billion extension of its Highland Valley mine from its own cash. Operations produced $1.6 billion of cash this quarter, more than double a year ago, which covered all capital spending with room to spare.
- Cash from operations: $1,590 million, up 146%
- Capital spending including stripping: $873 million, about 19% of revenue
- Free cash flow, by our math: $717 million
- Net cash: $1.9 billion, up $655 million in the quarter
- Dividends: $61 million; buybacks remain suspended under the merger agreement
The cash stays in the company because the merger agreement caps the dividend and bans buybacks, so every dollar earned above capital needs sits on the balance sheet until Anglo American closes. That is why net cash rose faster than profit did.
What to watch: the fourth-quarter working-capital release as Red Dog collects on its summer shipments, which Teck expects to reduce receivables substantially. A large release would push net cash higher still before the merger closes.
🐻 Bear Case
Bad Weather Exposed QB's Single Mining Front
Quebrada Blanca, or QB, is Teck's largest copper mine, high in the Chilean Andes, and the asset the Anglo American merger is built around. Price said the company kept "maintaining solid operating performance" through severe weather. The QB numbers say otherwise: output fell 15% from the second quarter, to 47,200 tonnes.
Snow and wind in August cut power to the plant, and wet ground then kept trucks away from the better ore into September. Teck admits its crews are "primarily focused in one phase of the mine, limiting operational flexibility", and that grades were "lower than planned due to weather-related constraints on access to higher-grade ore".
- Copper output: 47,200 tonnes, from 55,800 in the second quarter
- Recovery, the share of copper in the ore that reaches concentrate: 81.1%, from 83.3%
- Throughput: 117,000 tonnes a day, from 122,000
- QB net cash unit cost: US$2.48 a pound, from US$1.83 in the second quarter
- Weather-related shutdown costs across the group: $54 million
This matters because QB has now gone four quarters without tailings-related downtime, the problem that defined last year, and still missed its own pace. The constraint has moved from the tailings dam to the pit. More mining faces open "through Q4 2026 and into 2027"; until then a storm can cost the mine a month of planned ore.
What to watch: QB's fourth-quarter output and recovery rate, due with full-year results in February. Recovery back above 83% would confirm the weather explanation rather than a problem with the ore.
Copper Output Will Fall in the Fourth Quarter
Teck kept its full-year copper range, but it has already mined 391,600 tonnes. By our math the middle of the range leaves about 101,000 tonnes for the fourth quarter, down from 134,000 a year earlier and the smallest quarter since the tailings shutdown of 2025.
The drop is planned. Highland Valley, the British Columbia mine, had its best quarter in years with output up 25%. Teck now expects "lower grades, mill throughput and recoveries in the fourth quarter of 2026" as it shuts a grinding line for the mine-extension upgrade until January. Carmen de Andacollo will finish at the bottom of its range after its flood shutdown, and Antamina's zinc-rich ore is behind it.
On top of the plan, a strike began at Highland Valley on October 24. "Operations are currently continuing at a reduced capacity", Teck said, and the effect "will depend on the duration of the labour action". If the mine still reaches the top of its range, by our math it produces at most 16,800 tonnes in the quarter, less than half the third quarter.
This matters because the fourth quarter is the first reading on how much copper Teck delivers with its best performer on strike and in construction. Diesel is the second drag: higher fuel costs pushed stripping spend to the top of its range and added US$19 million to QB's operating bill.
What to watch: Highland Valley's fourth-quarter copper, reported in February. Output near 17,000 tonnes would mean the strike and the shutdown cost no more than the plan already assumed.
Risks this quarter didn't answer
Four standing concerns got no new numbers this quarter, or only numbers that confirm the direction without settling it. Each has a disclosure that would move it, and the first one decides whether Teck still exists as a standalone company next spring.
- Merger approval from China: the last regulatory hurdle; Teck says the deal "remains on track to close within the originally stated 12–18 months", a window that runs to March 2027
- Zinc at Red Dog: output down 13% on lower grades, and Teck now reports "slippage along a known fault in the Aqqaluk pit"; the December mine-extension study is the next reading
- Legal claims: the US Supreme Court asked the Solicitor General for views on the Columbia River case on October 5; Nippon Steel's coal-sale indemnity claim remains in dispute with no amount disclosed
- The old 800,000-tonne copper target: not mentioned for a fifth quarter, while the 2027 and 2028 ranges sit far below it; nobody has said it is withdrawn
👓 Other Themes
Chile's Tax Cut Brings a One-Time $70 Million Charge
Chile cut its corporate tax rate by four points, phased in from 2027. Teck's Chilean mines carry tax losses, which are worth less at a lower rate, so the company expects a one-time deferred-tax charge of about $70 million in the fourth quarter. After that the lower rate helps the after-tax cash of QB and Carmen de Andacollo.
💲 Other KPIs
A gain for a fifth straight quarter, but smaller than the spring's $240 million. These adjustments revalue metal already shipped but not yet priced, so they rise when prices climb during a quarter and reverse when prices fall. The gain added $0.21 to earnings per share and equals 4.5% of revenue.
Up 18% since year-end, faster than the seasonal pattern alone explains, because Red Dog shipped its summer cargoes at higher zinc prices. Working capital absorbed $236 million of cash in the quarter. Teck expects most of these receivables to turn into cash in the fourth quarter, which would lift net cash again.
Up 0.4% from a year ago, the first year-on-year rise since the buyback programme began, because the merger agreement has blocked repurchases since July 2025 and option exercises add shares. Profit per share therefore tracks profit almost exactly this year, with no help from a shrinking share count.
🔮 Guidance
Unchanged. Highland Valley should finish toward the top of its range and Carmen de Andacollo at the bottom. By our math the middle of the range leaves about 101,000 tonnes for the fourth quarter, a quarter below the third and a fifth below last year's. The 2027 range of 505,000–580,000 tonnes also stands, resting on QB and the Highland Valley upgrade.
Unchanged despite the weather. By our math the fourth quarter needs 41,500–76,500 tonnes, with the middle at 59,000, which would be QB's best quarter of the year. No maintenance shutdowns remain in 2026, and the plan counts on more mining faces opening.
Unchanged, and now expected at the high end on Red Dog's strong first nine months. The plan still has zinc output falling 2026 to 2028 as Red Dog's grades decline and a fault in the Aqqaluk pit limits access to better ore.
Unchanged, now expected at the high end. Teck plans fourth-quarter output similar to the third, with maintenance shutdowns in the zinc and lead circuits that reduce by-product metals such as silver and germanium.
New. The shipping season ends in early November, so fourth-quarter sales fall to a fraction of the third quarter's 246,700 tonnes. This year's three quarterly sales targets landed at or above the middle, by an average of about 8%.
Lowered. The new middle is about 6% below the old one, because silver, molybdenum and gold credits run far above the old assumptions. Yet the first nine months cost US$1.72, so by our math even the bottom of the new range implies a fourth-quarter cost above US$2.10 a pound, as fewer pounds carry the fixed costs.
Lowered by half. Silver at US$65 an ounce in the new plan, against US$36 before, explains most of the move, since silver is Red Dog's main credit. The first nine months cost US$0.30, so the range implies a higher fourth quarter, when Red Dog sells little and unit costs swing.
Lowered. This is the cost before by-product credits, so the move reflects spending and smelter charges rather than silver. The first nine months ran at US$0.69, close to the bottom of the new range, with lower-grade ore the main pressure ahead.
Unchanged, now expected in the top half. The Rock Bench 6 tailings work at QB, about US$100 million, was not in the original plan. Nine-month spending stands at $912 million, so the fourth quarter runs near the third-quarter pace of $330 million.
Unchanged, now expected at the high end because diesel costs rose. Nine-month spending is $388 million, mostly waste removal for the Highland Valley extension, which Teck says stays elevated through 2029.
Unchanged, now expected at the low end. QB's molybdenum plant suffered the same weather disruption as its copper circuit, producing 600 tonnes against 840 in the spring.
❓ Key Questions
How much copper will the Highland Valley strike cost?
Teck says output continues at reduced capacity but keeps its high-end view for the mine. Investors need the weekly production loss and whether the January mill restart slips, since Highland Valley is the 2027 growth engine alongside QB.
Where do QB's throughput and recovery stand against design?
Both fell this quarter and management blames weather and single-phase mining. A design-rate comparison, and the timing of permits and capital for debottlenecking, would show how much of the merger case still depends on fixes.
Is China's merger review on a timetable?
The 12–18 month window closes in March 2027. Teck has not said what remedies, if any, the regulator has raised, or what happens to the outlook if the window passes.
Is the 800,000-tonne copper target withdrawn?
Teck stated the goal three times in 2024 and 2025 and has not mentioned it since the merger. The 2027 and 2028 ranges sit far below it; a plain answer would clarify what growth the standalone plan still promises.
What will Teck commit to the Trail metals expansion?
The Canada Growth Fund may invest up to $400 million of an $850 million plan. Teck's own share, the gallium capacity it would add and the decision date determine whether the Trail write-back becomes a growth story.