Mining company Teck sees record quarter amid COVID-19 pandemic commodity surge
Surging global commodity prices helped lift Teck Resources Ltd. to a record third quarter and the company said Wednesday it's on track to surpass those results in the fourth quarter of this year.
Commodity prices have skyrocketed this year due to increased economic activity as countries around the world roll out COVID-19 vaccination programs and lift public health restrictions.
“It was a record quarter, but it will likely be exceeded by Q4,” said Teck chief executive Don Lindsay in a conference call with analysts. “If you look at the pricing we've experienced in October, it's higher than it was in September, right across the board.”
Teck saw strong realized pricing for all of its principal products in the third quarter, particularly steelmaking coal, which rose to US$237 per tonne compared with US$102 in the same quarter last year. Thirty-two per cent of Teck's steelmaking coal sales went to China.
Teck's realized zinc price climbed to US$1.36 per pound, up from US$1.05, while its realized copper price rose to US$4.28 per pound.
“This is a very exciting time for our industry and for Teck in particular,” Lindsay said. “There are opportunities ahead with global growth and the transition to a lower carbon economy will drive new copper metal demand. And in the near term, given the current commodity outlook, we have the ability to generate significant EBITDA and free cash flow.”
Teck confirmed Wednesday that construction of its massive new QB2 copper mine in Chile is now two-thirds complete, with production expected to begin in the second half of 2022. The mine is expected to produce 300,000 tonnes of copper equivalent per year for the first five years of its life.
Copper is used extensively in renewable energy installations and electric vehicle systems.
However, Lindsay said while QB2 is expected to double Teck's consolidated copper production by 2023, construction costs for the new mine are now anticipated to be up to five per cent higher than the originally estimated US$5.26 billion. The company said this is because of challenges with “port offshore” and tailings facility construction.
Teck also said Wednesday it is facing input cost pressures due to the rising cost of diesel, supplies and labour, as well as ongoing supply chain issues.
“We don't know how it's going to evolve,” Lindsay said. “Obviously, there's supply disruptions in the global economy all over the place. And so we want to make sure that we flagged that . . . We're going to hit with it, too.”
The Vancouver-based miner reported a third-quarter profit Wednesday of $816 million, up from $61 million in the same quarter last year. Revenue totalled $3.97 billion, up from $2.29 billion.
On an adjusted basis, Teck said it earned $1.88 per diluted share in its most recent quarter, up from an adjusted profit of 24 cents per diluted share in the same quarter last year.
The average analyst estimate had been for an adjusted profit of $1.50 per share, according to financial market data firm Refinitiv.
This report by The Canadian Press was first published Oct. 27, 2021.
CTVNews.ca Top Stories
Chants of 'shame on you' greet guests arriving for the annual White House correspondents' dinner
An election-year roast of U.S. President Joe Biden before journalists, celebrities and politicians at the annual White House correspondents' dinner Saturday.
What is a 'halal mortgage'? Does it make housing more accessible?
The 2024 federal budget announced on April 16 included plans to introduce “halal mortgages” as a way to increase access to home ownership.
Here's where Canadians are living abroad: report
A recent report sheds light on Canadians living abroad--estimated at around four million people in 2016—and the public policies that impact them.
Deadly six-vehicle crash on Highway 400 sparked by road rage incident
One person was killed in a six-vehicle crash on Highway 400 in Innisfil Friday evening.
Opinion I just don't get Taylor Swift
It's one thing to say you like Taylor Swift and her music, but don't blame CNN's AJ Willingham's when she says she just 'doesn't get' the global phenomenon.
Invasive and toxic hammerhead worms make themselves at home in Ontario
Ontario is now home to an invasive and toxic worm species that can grow up to three feet long and can be dangerous to small animals and pets.
Harvey Weinstein hospitalized after return to New York from upstate prison
Harvey Weinstein’s lawyer said Saturday that the onetime movie mogul has been hospitalized for a battery of tests after his return to New York City following an appeals court ruling nullifying his 2020 rape conviction.
'We are declaring our readiness': No decision made yet as Poland declares it's ready to host nuclear weapons
Polish President Andrzej Duda says while no decision has been made around whether Poland will host nuclear weapons as part of an expansion of the NATO alliance’s nuclear sharing program, his country is willing and prepared to do so.
Central Alberta queer groups react to request from Red Deer-South to reinstate Jennifer Johnson to UCP caucus
A number of LGBQT+2s groups in Central Alberta are pushing back against a request from the Red Deer South UCP constituency to reinstate MLA Jennifer Johnson into the UCP caucus.