Teck Resources Limited (TECK) | The Buildout — AI Infrastructure
The Verdict
Teck Resources is a Canadian natural-resources company organized into copper and zinc reportable segments. Its copper concentrate feeds electrical infrastructure through long-term contracts; its Trail Operations smelts and refines zinc and lead while producing critical minerals including germanium, indium, and antimony. The AI-infrastructure buildout reaches Teck indirectly — through copper demand in power, grid, and data-center equipment and through specialized materials used in fiber optics, infrared optics, and power electronics. Management does not frame the company as an AI business, and Teck reports no AI-specific revenue.
| Market Cap | — |
| Revenue (TTM) | $10.0B |
| Revenue Growth | +41.7% |
| EBITDA Margin (TTM) | 43.5% |
| Net Debt | $2.6B |
| Earnings Beats | 7 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Copper production increased 25% year-over-year in Q2 2026, with higher output across all copper operations.
- QB posted a third consecutive quarter of stable operations, with no TMF-related downtime in the past three quarters.
- Adjusted EBITDA margin reached a record 61% in Q2 2026, up from 36% a year earlier.
- Net cash rose to $1.2 billion at June 30, up $1.0 billion in H1 2026.
- Trail gross profit before D&A rose to $203 million in Q2 2026 from $42 million a year earlier.
What We’re Watching
- China SAMR approval remains outstanding; management says no remedy requests so far, but a delay or condition would change merger economics and timing.
- Second-half copper production is expected lower at Highland Valley on mill tie-in downtime and lower grade, and at Antamina.
- By-product price reversal could lift net cash unit costs back toward guidance; the CFO conditioned below-midpoint costs on by-product pricing persisting.
- Rock Bench 6 decision in late August or early September could add approximately $100 million of 2026 capex, with unclear classification inside or outside prior capital guidance.
The thesis is strengthening on operations but still hinges on a binary regulatory event. QB has moved from tailings risk to stable operation, Trail is becoming a strategic-metals platform, and the balance sheet is building net cash. But full-year guidance was held because second-half volumes and costs are expected to soften, and the Anglo American merger is not complete. The open question is whether China SAMR approval arrives cleanly and on time.
Earnings Beat
Teck reported Q2 FY2026 revenue of $2,540.7 million and gross margin of 44.3%. EBITDA was $1,365.2 million, or 53.7% of revenue; net income was $601.9 million, and free cash flow was $511.7 million.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $2.5B | $2.8B | $1.5B | +70.8% |
| Gross margin | 44.3% | 43.5% | 23.3% | +2100bps |
| EBITDA | $1.4B | $1.4B | $507M | +169.1% |
| EPS | $1.22 | $1.20 | $0.30 | +301.5% |
| Copper net cash unit cost | $1.64/lb | n/a | $2.02/lb | -$0.38/lb YoY |
| Zinc net cash unit cost | $0.35/lb | n/a | $0.49/lb | -$0.14/lb YoY |
The short answer to your question is no… we see this as an acceleration and, you know, essentially a derisking that allows us to further underwrite that ongoing operational continuity that we have worked so hard to achieve over the last 3 quarters.— Jonathan Price, Chief Executive Officer, July 23, 2026
Management tone: Management's tone shifted from execution-focused caution in Q1 to more operational self-assurance in Q2. On the Q2 call, executives described QB as 'unconstrained from the TMF' and pointed to three consecutive quarters of stable operations, while still cautioning that second-half copper volumes would be lower at Highland Valley and Antamina.
Management Guidance
All formal FY2026 guidance was held on the Q2 call: copper production 455,000–530,000 tonnes; copper net cash unit cost $1.85–$2.20/lb; zinc in concentrate 410,000–460,000 tonnes; refined zinc 190,000–230,000 tonnes; and zinc net cash unit cost $0.65–$0.75/lb. HVC MLE capex was held at $900 million–$1.2 billion for 2026 and $2.1–$2.4 billion total. Management also reiterated sustaining capital plus TMF capital of $1.8–$2.1 billion, growth capital of $1.5–$1.9 billion, and total capital including stripping of $3.2–$4.0 billion. CFO Crystal Prystai signaled that if by-product pricing persists, copper and zinc costs would come in below guidance midpoint.
Trajectory
Revenue rose to $2,540.7 million in Q2 FY2026 from $1,487.3 million a year earlier, roughly 71% higher, while gross margin expanded to 44.3% from 23.3%. The improvement was driven by higher copper production, up 25% year-over-year, plus record copper prices and strong by-product credits, alongside a 122% increase in zinc segment gross profit before D&A. The numbers show revenue trajectory accelerating and margins expanding; the main caution is that management expects second-half volumes at Highland Valley and Antamina to step down.
The Model
No projection published for this company. No model projection is available for this company. The model has no locked FY+1 or FY+2 revenue and EBITDA projections on file for Teck, so forward direction is anchored to management's held FY2026 production and cost guidance rather than a model forecast.
The model publishes revenue and EBITDA projections only where the evidence supports them. Where it does not, nothing is shown rather than an estimate.
Looking Ahead
The next 12 months are shaped by the Anglo American merger and a series of operational de-risking milestones. Merger close is expected between September 2026 and March 2027, subject to China SAMR approval, with post-approval close described as within a couple of weeks. On operations, QB steady-state is targeted for year-end 2026, Rock Bench 6 may start in late August or early September, and Highland Valley MLE is in its peak capital year. Red Dog's shipping season runs through Q3, and the S&P/TSX indexation consultation closes August 21, 2026.
- August 21, 2026S&P/TSX indexation consultation closes — Determines whether Anglo Teck retains index membership.
- Late August – early September 2026Rock Bench 6 decision — Tests whether ~$100M capex proceeds and fits inside prior capital guidance.
- September 2026United Steelworkers Local 7619 agreement — Collective agreement in effect to September 2026; labor continuity for represented operations.
- September 2026 – March 2027Anglo American merger close — Tests China SAMR approval and final merger execution.
- Year-end 2026QB steady-state declaration — Tests whether QB maintains three-plus quarters of stable operations.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $6.5B | $7.7B | $10.0B | +18.7% |
| Gross Margin | 17.4% | 24.0% | 34.9% | +657bps |
| EBITDA | $1.2B | $2.7B | $29.5B | +120.4% |
| EBITDA Margin | 18.9% | 35.0% | 43.5% | +1,616bps |
| Net Income | $292M | $1.0B | $1.8B | +245.4% |
| Free Cash Flow | $117M | −$534M | $1.3B | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)34.9%
- EBITDA Margin (TTM)43.5%
- Net Margin (TTM)17.8%
- ROIC10.5%
- FCF Conversion24.9%
- SBC / Revenue0.0%
The Company
Teck Resources Limited is a Canadian natural-resources company organized into copper and zinc reportable segments. Its principal products are copper and zinc, with copper concentrate sold primarily under long-term contracts where treatment and refining charges are negotiated annually. The 40-F states that electrical conductivity accounts for over 65% of global copper demand, which is the main channel through which electrification and AI-adjacent infrastructure reach Teck.
Teck operates Quebrada Blanca and Carmen de Andacollo in Chile, Highland Valley Copper in British Columbia, and a 22.5% interest in Antamina in Peru for copper. Zinc comes from Red Dog in Alaska and Antamina co-product, with Trail Operations in British Columbia running an integrated zinc-lead smelting and refining complex that produces critical minerals such as germanium, indium, and antimony. In 2025, Teck produced 453,500 tonnes of copper and 11.4 million ounces of silver.
Business Segments
Competitive Landscape
Teck's copper and zinc businesses sit among large diversified miners; the 40-F describes Red Dog as one of the world's largest producers of mined zinc and Trail as one of the world's largest integrated zinc and lead smelting and refining operations. Management frames the Anglo American merger as creating a global top-five copper company and a leading critical minerals company.
- BHP BillitonNamed in filings as a 33.75% owner of Antamina; not discussed as a direct competitor.
- GlencoreNamed in filings as a 33.75% owner of Antamina; not discussed as a direct competitor.
- Mitsubishi CorporationNamed in filings as a 10% owner of Antamina; not discussed as a direct competitor.
Supply Chain
Teck sits upstream as a concentrate producer feeding smelters and refiners. Documented offtake relationships include Royal Gold and Franco-Nevada; documented suppliers include BC Hydro, AES Andes, and Agrium Canada.
More on TECK: Earnings recap