With the ink just drying on a new three-year labour deal, Teck Cominco (TEK-T) says it will boost to 97.5% its stake in the Highland Valley Copper mine, 60 km southwest of Kamloops, B.C.
Teck will do so by exercising its right of first refusal on BHP Billiton‘s (BHP-N) minority 33.57% stake. The price tag rings in at US$73 million. Late last year, BHP agreed to sell its stake to privately-owned British Columbia-based Quadra Mining.
“Increasing our interest in Highland Valley is a low risk opportunity for Teck Cominco to significantly increase its copper production at an ideal point in the copper price cycle,” said David Thompson, Teck’s CEO.
Just hours before the announcement, the union at Highland Valley ratified a contract it called “the best union contract in the B.C. mining industry for the last 15 years.”
The new deal provides for a 5% wage increase for the 776 union members (retroactive to Oct. 1.), and also includes 3% raises in October of 2004 and 2005. Also included are improvements to the pension plan, health benefits, dental and optical coverage, long-term disability payments and severance provisions.
The Highland Valley Copper open-pit copper mine is expected to produce around 174,000 tonnes of copper in concentrate per year over its remaining 5.5-year lifespan. Teck figures its increased stake will boost its planned copper production for 2004 by around 28%.