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Teck's Don Lindsay weathers the storm Add to ...

For Don Lindsay, the starkest indicator of his company's crisis was when the ships stopped coming. From his home, the CEO of mining giant Teck Resources Ltd. can count the boats lined up in the port of Vancouver to carry Teck's coal to the world.

"When the customer stops sending ships, you can see it," says Mr. Lindsay, 51, a former investment banker whose youthful face belies a turbulent five years as CEO.

In December, 2008, shortly after Teck closed a monumental $14-billion deal to buy the Fording coal business, the ships quit appearing. Their absence underscored the economic meltdown that, in the next several months, threatened to sink Canada's largest diversified metals producer.

Today, the ships are back and Mr. Lindsay, having finessed a difficult credit restructuring and acquired a Chinese investor, is breathing a big sigh of relief. But the game has changed, he says. With global recovery proceeding, although fitfully, he is focused on building cash flow from the resource gains made, with some pain, over the past five years.

How do you manage the stress?

The toughest thing is to keep things in perspective. The market always overreacts too positively or too negatively. The boom isn't as good as you think it is, and the crash isn't as bad as you think it is.

What was your darkest moment in the latest crash?

We knew what was happening. We were amazed, on Sept. 30, 2008, that the banks still lent us the money [to buy Fording]... even though Lehman Brothers had gone down, Citibank had been saved, and Goldman and Morgan Stanley had been converted [to banks]to save them.

We had a fiduciary obligation to do everything we could to close the deal, which we did. Then, you knew you were in for a very tough time. So you move into action; you go full out. You don't have time to have a dark moment.

When did it hit home?

Between Christmas and New Year's that year. I was up at our cabin. I'm a single dad with two young girls and I put the girls to bed and I was alone, just staring at the fire, thinking, "Oh my God, what have I done? How am I going to get out of this one?" That was probably the darkest day, when you know you put the plan in place but you don't know if it is really going to work. I had time to reflect and go, "Wow, this is going to be tough."

How do you feel now?

It has been pretty intense but I'm proud of where we ended up. We worked hard to be well positioned in key commodities that the world needs, particularly China. In the last five years, we've done a lot of building. We now have $1,000 of resources per share, and at much lower [commodity]prices. We used to have less than $500.

In the next five years, it is more about converting the resources we got hold of into production and cash flow. We are moving into a different type of growth. It doesn't mean we won't do acquisitions, but they aren't needed as much because of what we did in the past five years.

And you have a Chinese partner?

The Chinese coming on board was the 12th step in our 12-step plan. There is a bit of method in my madness - I called it the "12 steps" on purpose, as opposed to "12 points" or whatever.

In October-November 2008, when the world was in freefall and nobody knew where the bottom was, you needed a manageable plan everyone could relate to. The 12th step was to find a strategic investor. We had several choices - major mining companies, major customers - but to get what is effectively China's sovereign wealth fund was by far the most preferable.

Are there lessons about working with the Chinese?

This didn't happen overnight. I've been going to China for a long time. There is a point at which, all of a sudden, you've been going there long enough that they know you. Then you can probably do business more readily.

Our shareholder [China Investment Corp.]wanted exposure to commodities but they did not need to control them. There are no commercial arrangements, as such. But we are selling coal to China, which we weren't before. They have facilitated introductions.

But don't Canadian companies worry about the Chinese compulsion to control?

It's case by case. CIC is a passive investor; they wouldn't want to take a position over 20 per cent. They have 6 per cent of the votes and 17 per cent of the equity. They didn't even have a board seat for almost a year - and we invited them.

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