Electrification, Teck Resources & the Supply / Demand Mismatch in Copper (3:25)

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Danton Goei: 

One of the interesting trends that we see out there today, of course, is electrification, right? This is a global trend, uh, not just here in the US, and it's, but it's meaningful, and it'll, it'll have a big impact over the next several decades.

One of the biggest beneficiaries of this is tech resources. So tech, um, is a company that today is one of, is one of the biggest copper producers, uh, in the world. And copper, of course, is, conduct electricity. It's hugely important for the distribution of electricity in buildings, in power generation networks, and also in vehicles, of course, I mean, you know, electric vehicles have four times the content of copper versus a internal combustion engine car.
So that is hugely meaningful. And the other interesting thing though, is that starting next year, there is a big gap in terms of supply of new mines coming online globally, right? And so this is the impact of investment decisions that were made long time ago, many years ago. And but next starting next year, there'll be a gap of several years of no new mines, no meaningful new mines coming online.

And so that's hugely important when you think about the supply demand, and we've talked about the growing demand. And tech is actually very well positioned because they have a new mine that just came online in Chile that is going to double their copper production.

So we love the ability to lean into that, take an advantage of the supply, demand, mismatch, and be one of the few companies that are growing production over time.

In addition to that, the company is also very shelter-friendly, they just spun off their met coal business and so we know that this management team is not just focused on you know empire building but really willing to shrink to greatness and focus on returns in addition to having great inventory for an absolutely necessary commodity in the world.

 

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