Donald Lindsay, President & Chief Executive Officer of Teck Resources Limited, in Teck's downtown Vancouver office.LAURA LEYSHON/The Globe and Mail
Teck Resources Ltd.'s chief executive officer says multiple-voting class-A shares and veteran chairman Norman Keevil are bolstering Canada's largest diversified mining company's ability to withstand the pressures from low commodity prices.
"It is a truly long-term mindset at the top of the house, starting with our chairman, who has been with the company for over 50 years," Don Lindsay said. "The A shares give us the ability to think long term and make those investments on that basis. We're probably less influenced by short-term market activity than most companies. That may frustrate some of you who have to deal with short-term trading flows and shareholder demands and that sort of stuff."
Vancouver-based Teck is focused on investing in its long-life assets in coal, copper and zinc, Mr. Lindsay said Wednesday during Teck's webcast for investors and analysts.
Mr. Keevil, 78, has been chairman since 2001. He served as president and CEO at Teck and its predecessor firms from 1981 to 2001. His son, Norman Keevil III, serves on the board of directors.
Teck's key shareholder with 28.68 per cent of the voting rights is Temagami Mining Co., which is 51 per cent owned by the Keevil family's Keevil Holding Corp. and 49 per cent by Japan's Sumitomo Metal Mining Co., according to Teck's management proxy circular released last week. Temagami controls 45.97 per cent of Teck's class-A stock, which each carry the right to 100 votes per share.
Other investors with large stakes in Teck include China Investment Corp., which has 17.87 per cent of the miner's class B subordinate voting shares (6.74 per cent of total voting rights). The B shares have the right to one vote per share. The Caisse de dépôt et placement du Québec, which owns both A and B shares, controls 11.13 per cent of the voting rights, the circular said.
Asked whether there has been any discussions at Teck to collapse the A shares, Mr. Lindsay replied: "None whatsoever and I don't anticipate there being any."
Teck, which runs five coal mines in southeast B.C. and one in Alberta, is a low-cost coal producer and has been able to still make money despite depressed prices.
The company makes metallurgical (coking) coal, which is exported to Asia for the production of steel. Coal is the largest business unit at Teck, accounting for 37 per cent of revenue last year.
While Mr. Lindsay isn't forecasting that commodity prices will go through an even deeper dive than already experienced, he said Teck is open to doing what is necessary to thrive, including the option to offer investors a piece of the action at the Fort Hills joint venture in northern Alberta's oil sands.
"We have lot of levers to pull that others don't," he said. "If things took a really significant downturn for the worse, we could also create royalties on each of our businesses."
Calgary-based Suncor Energy Inc. holds a 50.8-per-cent stake in the Fort Hills project. France's Total SA has a 29.2-per-cent interest while Teck owns 20 per cent of the venture. Production of bitumen is scheduled to begin in late 2017.
Mr. Lindsay noted that Alberta's NDP government did not raise oil royalty rates: "Some common sense prevailed there."
In November, Teck announced the elimination of 1,000 jobs at its offices and operations worldwide through layoffs and attrition, representing almost 10 per cent of its work force. Including the latest move to reduce jobs, Teck has disclosed the loss of 2,000 positions over the past 22 months.
Teck's semi-annual dividend rate fell to 5 cents a share in December. Earlier in 2015, the miner decreased the dividend to 15 cents from 45 cents.
Brent Jang