Teck Announces Higher Coal Gross Profits Despite Economic Headwinds

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Teck posted an increase in profits from its coal division in its quarterly update, despite economic headwinds and the company’s infrastructure reliability issues at the Elkview mine.

According to the third quarter (July-September) report released at the end of October, the Coal Division’s gross profits increased 37% compared to the same period in 2021, with the company attributing credit to the still high prices of steelmaking coal. United States. $304 per ton (compared to US$237 per ton in Q3 2021).

Gross profit for the Coal Division was $1.2 billion for the quarter, compared to $901 million in the third quarter of 2021. revised guidance released in September due to an outage at the Elkview mine.

The shutdown was due to the failure of a conveyor belt which forced the company to cease production and reduce the forecast from 5.8-6.2 million tonnes to 5.5-5.9 million tonnes for the quarter. Teck’s four Elk Valley mines contribute to quarterly production. Elkview is listed as the second of four with an annual capacity of 9 million tons per year.

Teck has “substantially completed” the search for components to upgrade the facility and reported that a production restart is expected by the end of November.

The company appears to be backtracking on its expectations for the year 2023, with the company listing external challenges and Elkview itself as obstacles to reaching the company’s nameplate capacity of 26 to 27 million tonnes of coal production per year.

“(Obstacles) include severe weather events including rain, floods, extreme cold and wildfires in 2021, as well as the COVID-19 pandemic and the associated ongoing global disruption of supply chains and the availability of labour. Therefore, to better reflect the increasing frequency of these adverse events and the associated risk of impacts to our operations, we have reduced our three-year production forecast from 2023 from 26 to 27 million tonnes to 25 to 26 million. tons.

With the 2022 challenges, total production for 2022 is expected to be between 22 and 22.5 million tonnes (the benchmark range thins throughout the year as quarterly updates complete the data) .

Across all divisions, the company said inflationary cost pressures were having an impact with operating costs up 14% for the quarter, “of which about half is related to higher diesel costs,” we read in the report.

The full report can be read on Teck’s website.


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