Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Teck Resources is holding talks with the US and Canada about supplying minerals key to their defence industries, if it can obtain support such as minimum prices and agreements to buy.
Negotiations about the possible supply of germanium, antimony and gallium, which were disclosed by Teck chief executive Jonathan Price on Friday, come as western countries face tightening export restrictions imposed by China on the niche minerals.
Price said the Vancouver-based company — which is in the middle of a $50bn merger with Anglo American — was in active conversations with US and Canadian officials as it considered whether to extend the life of its Red Dog zinc mine in Alaska, which produces germanium as a byproduct.
“We believe we can produce enough germanium to supply all of the needs of North America and potentially all of the needs of the G7 countries,” Price told the FT Metals and Mining Summit on Friday. The company was talking to the governments about the “potential for price floors” and “stockpiling” arrangements, he added.
The comments came just a day after China unveiled sweeping new export restrictions on rare earth metals and permanent magnets, which are also used in defence applications.
Chinese export restrictions have this year pushed the price of germanium, which is essential to the production of thermal imaging systems used in military equipment such as fighter jets, to the highest level in at least 14 years.
Teck is the world’s fourth-largest producer of germanium, and produces a small amount of antimony. It could potentially produce much more of the minerals — and add gallium — by reconfiguring its processing operations.
China had used its dominance in the markets “to some extent as a coercive tool in trade relationships”, Price said.
The US’s response to Beijing’s dominance of the critical supply chains has included taking equity stakes in some mining companies. Price said such direct government equity investment was not “necessarily a path that we need to be going down”.
Separately, Price said he took personal responsibility for a major downgrade of production guidance at its flagship copper mine in Chile.
He said he was enhancing his oversight of operations, and that the “intrinsic value” of the Quebrada Blanca mine was “very much intact”.
“I’ve taken a far more direct, more hands-on role over the last couple of months,” Price added.