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
Spectacular aurora light show to be seen across Canada Friday night
A rare and severe solar storm is expected to bring spectacular displays of the northern lights, also known as aurora borealis, across much of Canada and parts of the United States on Friday night.
Which Canadian cities have the highest and lowest grocery prices?
Where you live plays a big factor in what you pay at the grocery store. And while it's no secret the same item may have a different price depending on the store, city or province, we wanted to see just how big the differences are, and why.
McGill University seeks emergency injunction to dismantle pro-Palestinian encampment
McGill University has filed a request for an injunction to have the pro-Palestinian encampment removed from its campus.
Swarm of 20,000 bees gather around woman’s car west of Toronto
A swarm of roughly 20,000 bees gathered around a woman’s car in the parking lot of Burlington Centre.
U.S. says Israel's use of U.S. arms likely violated international law, but evidence is incomplete
The Biden administration said Israel's use of U.S.-provided weapons in Gaza likely violated international humanitarian law but wartime conditions prevented U.S. officials from determining that for certain in specific airstrikes.
Barron Trump declines to serve as an RNC delegate
Former U.S. President Donald Trump's youngest son, Barron Trump, has declined to serve as a delegate at this summer’s Republican National Convention, according to a senior Trump campaign adviser and a statement from Melania Trump's office.
Mother assaulted by stranger while breastfeeding baby in her car: Vancouver police
A person was arrested in East Vancouver Thursday after allegedly entering a car while a mother was breastfeeding her four-month-old boy.
'We have laws': Premier Smith says police action justified in Calgary
The actions, including the decision to use non-lethal force, to disperse pro-Palestinian protesters from the University of Calgary campus were justified, Alberta Premier Danielle Smith said Friday.
'State or state-sponsored actor' believed to be behind B.C. government hacks
The head of British Columbia’s civil service has revealed that a “state or state-sponsored actor” is behind multiple cyber-security incidents against provincial government networks.