Teck Resources appears to be exiting the oil sands business with a plan to sell its stake in the Fort Hills oil sands project in Alberta to Suncor Energy.
Teck owns a 21% stake in the Fort Hills oil sands project. Under the agreement announced today, Suncor will acquire Teck's share for $1 billion, the companies announced in separate news releases.
"As a result of the transaction, we expect to record an after-tax, non-cash impairment charge of approximately $950 million in the third quarter of 2022," Teck said in a news release.
Teck also abandoned its own Frontier oil sands project in 2020.
Last year, the company produced a climate change outlook, which aims to make the company carbon neutral by 2050. Teck said at the time that it would shift focus more towards copper, and there has even been speculation Teck may also be considering selling its substantial metallurgical coal mining assets.
Teck is a diversified mining company, with metallurgical coal, copper and zinc mines, and a lead and zinc smelter. A few years ago, it entered the oil sands business by taking a stake in the Fort Hills project, and later announced plans for a $20 billion oil sands project of its own -- the Frontier project -- which it then backed away from in 2020.
“This transaction advances our strategy of pursuing industry leading copper growth and rebalancing our portfolio of high-quality assets to low carbon metals,” Jonathan Price, Teck's new CEO, said in a news release. “We will review the use of proceeds in accordance with our capital allocation framework early in 2023.”
Teck's long-time CEO, Don Lindsay, retired earlier this year and was replaced by Price at the end of September.