This firm’s shares have more than tripled from their March 2020 low as new COVID-19 vaccines help world economies recover.

The company will also benefit from the big expansion of its copper operations in Chile—and that shift is also reducing its reliance on selling coal to steelmakers. Meanwhile, the potential for a spinoff of the company’s coal operations adds further investor appeal.

The stock trades at just 8.8 times the company’s 2022 earnings forecast even as revenue jumped 73.3% in the most-recent quarter.

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TECK RESOURCES LTD. (Toronto symbol TECK.B; www.teck.com) is a leading producer of metallurgical coal, a key ingredient in steelmaking. It also produces copper and zinc. Teck owns 21.31% of the Fort Hills oil sands project of northern Alberta.

Teck’s coal operations are spread across four mines in B.C.: Fording River (reserves should last 43 years); Greenhills (28 years); Line Creek (18 years); and the company’s 95%-owned Elkview (38 years). Teck ships that coal, mainly through West Coast ports, to steelmakers in Asia.

The recent flooding and mudslides in British Columbia disrupted Teck’s coal shipments to ports in the southern part of the province. In response, it diverted some of those shipments to the port of Prince Rupert.

Even so, the company now expects that its coal production for all of 2021 will range between 24.5 million and 25.0 million tonnes, down from its earlier forecast of 25 million tonnes.

The higher transportation costs will also increase its average coal costs per tonne to between $64 and $66 compared to its earlier estimate of $59 to $64.

However, coal prices are rising as the economy re-opens. The average price for the three months ended November 30, 2021, was $371 U.S. a tonne, up from $168 U.S. for the three months ended August 31, 2021. That will help offset the rising transportation costs.

The union representing over than 1,000 workers at the company’s Highland Valley Copper operations in British Columbia have voted in favour of strike action.

Highland Valley is the largest copper mine in Canada and accounted for 43% of Teck’s total copper production in 2020.

A strike would probably have little impact on Teck’s short-term profitability, as the shutdown would likely push up copper prices. In fact, copper prices have jumped and will probably continue to rise over the next few years as the metal is a key component in electric-powered cars and their batteries.

Mining Stocks: Diversified asset base helps spread risk and opportunity

The company gets 20% of its revenue from mining and processing zinc. It is, in fact, the world’s third-largest producer of this metal. Manufacturers use zinc to make steel more resistant to rust and corrosion.

Teck’s zinc operations centre on the Red Dog mine in Alaska; it ships most of its zinc to Teck’s Trail smelting and refining complex in B.C. Red Dog’s reserves should last another 11 years.

Copper production represents Teck’s third-largest business, at 31% of its overall revenue. The company has four copper mines: Highland Valley in B.C. (reserves should last 10 years); Carmen de Andacollo (35 years) and Teck’s 60%-owned Quebrada Blanca (almost exhausted), both in Chile; and its 22.5%-owned Antamina (12 years) in Peru.

Moreover, Teck is currently expanding its Quebrada Blanca copper mine in northern Chile. The project—called QB2—will increase the company’s copper production 60% and extend the production life of the Quebrada Blanca complex by 28 years. QB2 should begin operating later this year.

The stock trades at just 8.8 times its 2022 earnings estimate while the $0.20 dividend yields 0.5%.

Recommendation in The Successful Investor: Teck Resources Ltd. is a buy.