Teck, Antofagasta deny report of merger talks

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Teck Resources Ltd. and Antofagasta PLC denied a report that they were in merger talks to create one of the world's largest copper producers.

Teck "is not in discussions with Antofagasta in relation to any form of transaction," the Canadian miner said in a statement. "There are no other corporate developments that justify any significant movement in its share price."

A report by Bloomberg said the two miners had held early-stage merger discussions. The news sent Vancouver-based Teck shares soaring before the companies issued separate statements denying they are in merger discussions.

A union between the two miners would have required the approval of the Keevil family, which controls Teck, and Chile's Luksic family, which controls Antofagasta.

A deal may have helped cut Teck's $8-billion debt load and reduced the Canadian company's exposure to metallurgical coal.

Moody's Investors Service recently downgraded Teck to the lowest investment grade rating, citing the miner's debt and the continued weakness in commodity prices.

Teck, like the rest of the mining industry, is under pressure to cut costs and streamline operations to deal with the prolonged commodity slump. Mining giants such as Anglo American and BHP Billiton have been trying to sell assets with limited success.

Prices for metallurgical coal and copper – two of Teck's main businesses – have weakened since 2011 as China's economy cools. Metallurgical coal, used to make steel, is down 70 per cent and copper is off 40 per cent.

The miner's Class B shares closed at $19.45 on Monday, up 11 per cent, though the stock gave up most of the earlier gains in after-hours trading. Teck shares remain well below their record high of $64.62, reached early in 2011.