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
Young people 'tortured' if stolen vehicle operations fail, Montreal police tell MPs
One day after a Montreal police officer fired gunshots at a suspect in a stolen vehicle, senior officers were telling parliamentarians that organized crime groups are recruiting people as young as 15 in the city to steal cars so that they can be shipped overseas.
Man sets self on fire outside New York court where Trump trial underway
A man set himself on fire on Friday outside the New York courthouse where Donald Trump's historic hush-money trial was taking place as jury selection wrapped up, but officials said he did not appear to have been targeting Trump.
Mandisa, Grammy award-winning 'American Idol' alum, dead at 47
Soulful gospel artist Mandisa, a Grammy-winning singer who got her start as a contestant on 'American Idol' in 2006, has died, according to a statement on her verified social media. She was 47.
Sask. father found guilty of withholding daughter to prevent her from getting COVID-19 vaccine
Michael Gordon Jackson, a Saskatchewan man accused of abducting his daughter to prevent her from getting a COVID-19 vaccine, has been found guilty for contravention of a custody order.
She set out to find a husband in a year. Then she matched with a guy on a dating app on the other side of the world
Scottish comedian Samantha Hannah was working on a comedy show about finding a husband when Toby Hunter came into her life. What happened next surprised them both.
Shivering for health: The myths and truths of ice baths explained
In a climate of social media-endorsed wellness rituals, plunging into cold water has promised to aid muscle recovery, enhance mental health and support immune system function. But the evidence of such benefits sits on thin ice, according to researchers.
'It could be catastrophic': Woman says natural supplement contained hidden painkiller drug
A Manitoba woman thought she found a miracle natural supplement, but said a hidden ingredient wreaked havoc on her health.
Manitoba mom praises quick-thinking fire department for freeing daughter stuck in playground equipment
A Manitoba mother is praising firefighters for their quick work in helping her daughter who got stuck at a playground in Lorette, Man.
The Body Shop Canada explores sale as demand outpaces inventory: court filing
The Body Shop Canada is exploring a sale as it struggles to get its hands on enough inventory to keep up with "robust" sales after announcing it would file for creditor protection and close 33 stores.