Teck, giving lessons on what not to do

Fording, Jericho, Galore Creek, Nautilus. What do all these things have in common? They were all recent business ventures of Teck Cominco and they have all proven to be terrible decisions that are helping bring the company down.

The Fording deal is the most publicized, Teck payed $13.5 billion dollars to acquire Fording Canadian Coal Trust literally days before the credit crunch starting destroying the markets. They refused to revise the deal even when the markets and commodities were obviously heading towards lows, it's like a stubborn child sticking to his decision even when it was obvious that it's not a good one. Buying Fording might of seemed like a great idea last year when Teck was cash rich, coal was at all time highs and the future looked promising but going through with this in September was just foolish. Now Teck is stuck with a monstrous debt, a coal company that is worth a fraction of what it was when it paid a premium for it and Teck is now forced to sell off solid assets just to make ends meet. Their dividend payments were suspended and the share price of one of the pillars of Canadian mining has hit 20 year lows, imagine if Teck had not done this deal, they would be one of the best looking mining companies out there right now, cash rich and looking at growing their influence instead of selling it off.

Teck was also involved with Tehera Diamonds, giving them $30 million so they could continue mining operations at their Jericho mine. This was after Tehera had recorded losses on lower than expected grades of kimberlite. Not too long after, Tahera put the mine on care and maintenance and their stock is at around a penny now. $30 million flushed down the toilet.

Teck also acquired 50% interest with NovaGold for the Galore Creek project in British Colombia. The projects development costs were expected to be $2.2 billion dollars which quickly ballooned to over $5 billion before the project was scrapped and put on hold. NovaGold is a whole different story in itself, maybe I'll cover them tomorrow because they rival Teck with bad decisions lately.

Last but not least is Nautilus Minerals, Teck, among others, poured millions into a company planning on mining the sea floor. Giving hard cash for unproven technology, without even an idea as to when, what and how anything will be mined.

This is just a short list of some of Teck's financial decisions that they have done lately and has let up to a steep and major decline in their stock price and financial fact sheet. Until a major turnaround happens in the industry and in the company, they will suffer and will lose millions of dollars worth of assets, the only question now is what will remain of Teck once all the bleeding is over.

I guess we'll just have to wait and see.