TORONTO (Reuters) - Shares in Teck Resources (TECKb.TO) (TECK.N) plunged as much as 21.7% on Wednesday after the Canadian miner suspended construction at a massive copper project in Chile to limit transmission of the novel coronavirus, as falling copper prices also rattled investors.
Teck joins global miner Anglo American Plc (AAL.L), gold producer Newmont Corp (NEM.N) and others that have shuttered mines or wound down operations in resource-rich Latin America as governments tighten curbs to fight the fast-spreading virus.
Vancouver-based Teck said it would halt work effective immediately at its $4.7 billion Quebrada Blanca Phase 2 (QB2) expansion for an initial two-week period, a move that would affect roughly 15,000 workers who travel in large numbers to the site from all over Chile.
“This is the right decision to protect the health and safety of workers and their families, and to support the Chilean government efforts to halt the spread of COVID-19,” Teck Chief Executive Don Lindsay said in a statement.
The miner has billed QB2 as key to reducing its heavy reliance on steelmaking coal, but the expansion has been beset by delays and rising costs. Teck said it would resume construction “as soon as possible” subject to the ongoing virus threat but did not provide a timeline.
The stock was trading at C$8.93 after hitting a four-year low.
Teck owns 60% of the expansion project, with the balance held by Sumitomo Metal Mining Co. Ltd (5713.T) and the Chilean government. Production is expected to start in late 2021 and rise to 316,000 tonnes at full capacity.
Copper prices crashed below $5,000 a tonne for the first time in more than three years on Wednesday as growing expectations of surplus metal were reinforced by large deliveries to London Metal Exchange-registered warehouses.
Teck said there have been no confirmed cases of COVID-19, the respiratory illness caused by the new coronavirus, associated with QB2 employees or contractors to date.
Reporting by Jeff Lewis in Toronto; additional reporting by Arundhati Sarkar in Bengaluru; Editing by Andrea Ricci and Nick Zieminski