Canadian miner Teck Resources (NYSE:TECK) is not worried about the impact of proposed U.S. tariffs on the company’s business. During the latest earnings call, CEO Jonathan Price pointed out that the firm’s exports mainly go to Asia and Europe.
"In the event that tariffs are imposed, we expect trade flows to adjust. Teck has a resilient business driven by the diversification of our products and operations." Price said.
Teck’s latest earnings showed a profit of $385 million, or 75 cents per share, compared to a $167 million loss a year earlier. Adjusted earnings were 45 cents per share, up from just four cents a year earlier. Revenue rose to $2.8 billion, driven by record copper production at its Quebrada Blanca operations in Chile.
While most of this business would not be affected by the proposed 25% tariff on Canadian goods, Teck does export about 15% of its revenues to the U.S. in refined zinc, lead, and specialty metals such as germanium, indium, and sulfur products.
The situation in the uranium market is vastly different. Executives from Cameco (NYSE:CCJ), the world’s largest publicly traded uranium company, expressed concerns about a proposed 10% U.S. tariff on Canadian energy imports, anticipated for March 4.
CFO Grant Isaac noted that such a tariff would lead to price inflation across the uranium market, as non-tariff suppliers would raise their prices to just below the tariff threshold.
"A 10% proposed tariff from a major supply source like Canada will effectively raise the uranium price by 10%. It's kind of Econ 101," Isaac said on the earnings call.
CEO Tim Gitzel agreed with the assessment, recalling the 2017 Section 232 investigation into critical minerals imports, which prompted the company to add contractual protections against future tariffs.
"Our neighbor to the south has discovered the hammer in the toolbox, which is tariffs and we began to prepare for a future where they might use it and good thing we did. We wrote a number of contracts that effectively moved tariffs into the tax clause of a contract," he said.
As bringing on new production is challenging, he expects the shortage will intensify in the mid-2030s, when major mines, including Cameco’s Cigar Lake, reach the end of their mine life without adequate replacements.
"Cigar Lake satisfies 10% of global demand. That's an 18-million-pound hole in supply that the market has not yet fully appreciated," he warned.
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