Canada’s largest diversified miner, Teck Resources, reported a 41% drop in Q3 adjusted profit as higher coal sales volumes failed to offset weaker prices.
“We are pleased with our operating performance this quarter,” said Don Lindsay, CEO of Teck. “Our steelmaking coal sales of 7.6 million tonnes set a quarterly record and demand from customers is strong. However, the current price for steelmaking coal remains below what we believe is required to sustain adequate production in the industry in the long term. With the current market conditions, our near term efforts are focusing on our US$ 330 million cost reduction program, reducing our sustaining capital spending and reviewing the timing of our various development projects.”
A 28% decline in coal prices and an 8% fall in copper prices compared to 2012, reduced revenue by about US$ 410 million in Q3 2013.
While coal sales in the third quarter were a record 7.6 million t, up 36% from a year ago, coal cost of sales before transportation declined to US$ 50/t in Q3, compared with US$ 58/t in the same period last year.
Teck Resources noted the following achievements:
- The company received the British Columbia Environmental Assessment Certificate for the Line Creek Phase 2 project, which will maintain production and extend the mine life by 18 years.
- Teck reached an agreement to purchase approximately 7150 hectares of private land in the Elk and Flathead valleys of British Columbia for US$ 19 million, in order to protect key wildlife and fish habitat. These lands, in combination with ongoing reclamation work at its operations, will help the company to achieve its sustainability goal of creating a net-positive impact on biodiversity.
- The mining company was named to the Dow Jones Sustainability World Index (DJSI) for the fourth year running, indicating that its sustainability practices rank in the top 10% of the world’s 2500 largest public companies.
A weak steel market has hit the price of steelmaking and consequently metallurgical coal, which is typically more profitable than the thermal coal used to produce electricity. Nearly all of Teck's coal reserves are metallurgical coal.
Adapted from press release by Katie Woodward
Read the article online at: https://www.worldcoal.com/coal/24102013/teck_resources_announces_q3_loss_184/