VANCOUVER (CP) -- Teck Cominco Ltd. [TSX:TCK.B; NYSE:TCK] is interested in getting into the iron ore business, but chief executive Don Lindsay said Tuesday that nobody wants to sell out to the mining company in an industry that has been red hot and getting hotter.
''Those who are in the iron ore industry already, particularly the three key players, are experiencing the best times of their lives in iron ore,'' Lindsay told a conference call with analysts.
''It's going from a fantastic business to a spectacular business and they kind of want to hang on to their assets.''
Lindsay's comments come as Teck Cominco's partner in the Elk Valley Coal Partnership, Fording Canadian Coal Trust, goes through a strategic review, including a possible sale.
In addition to a 40% stake in Elk Valley, Teck Cominco holds about 19.95% of Fording.
''Our customers on the coal side have literally asked us to get into the business, and when you negotiate with customers if you had iron ore in your portfolio you'd probably do better on the coal side in terms of long-term contract performance,'' Lindsay said.
Teck Cominco is an often-mentioned potential buyer for Fording, but Lindsay said he had no guidance to give on the company's interest in acquiring the rest of the coal trust.
''We'll stand back and wait to see what the results are,'' Lindsay said of Fording's strategic review. He is also a director of Fording.
Late Monday, Teck Cominco reported a profit of 2007 of C$1.6 billion or C$3.72 per share as the company was hit was hit by slumping metal prices, strength in the loonie and writedowns of its suspended Galore Creek project and troubled Tahera Diamonds Corp. in the fourth quarter.
The result compared with a profit of C$2.4 billion or C$5.60 per share in 2006.
RBC Dominion Securities analyst Fraser Phillips noted in report to clients that production growth for Teck Cominco over the next 12 to 36 months is limited.
''On top of this, over the next two quarters the company's results will likely be negatively impacted by the strong Canadian dollar and rising costs, particularly at Elk Valley prior to the increase in prices we are expecting for the 2008 coal year,'' Phillips wrote.
''While the shares offer better value after the recent correction and coal price settlements could provide a positive catalyst, for the time being we are maintaining our sector perform rating until a decision is made on Petaquilla.''
Teck Cominco shares closed down C$1.67 at C$32.88 on the Toronto Stock Exchange on Tuesday.
Teck said Monday that, due to soaring costs at the Petaquilla copper project ''there can be no assurance that we will participate in the development of the project''.
An interim study has suggested the Panama project will cost US$3.5 billion to develop, more than double an earlier estimate from a year ago.
Under its current agreement with its partners on the project - Inmet Mining Corp. [TSX:IMN] and Petaquilla Copper Ltd. [TSX:PTC] - Teck Cominco must decide by March 31 if it wants to go ahead with an investment in the project.
''You can assume that the three parties are in active discussions and will likely be having discussions with the government as well,'' Lindsay said Tuesday.
(c) The Canadian Press 2008