Vancouver-based Teck Resources, Canada’s largest diversified miner which is close to completing a major oil sands project, reported on Thursday a nearly four-fold increase in quarterly profits.
The metallurgical coal business of Teck, also a major copper and zinc producer, accounted for 72% of its gross profits during the first nine months of the year.
Operationally Teck’s coal business has been humming. The company said its coking coal unit moved a record of 79 million bank cubic meters (BCM’s) during the quarter.
Third quarter steelmaking coal sales reached 7.54 million tonnes, the company’s second highest quarterly sales on record. Teck expects its steelmaking coal sales to be roughly 6.5 million tonnes this quarter and total production for 2017 at the lower end of 27–27.5 million tonnes.
The company said average realized steelmaking coal prices for the first nine months of the year came in nearly $100 above last year’s price at $178 per tonne. With forecast unit cost of sales in the range of $49 to $53 per tonne for 2017, met coal should continue to be a cash cow for Teck. A major water management capex project in the Elk Valley would add $6 a tonne – from 2023 onwards.
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