© Reuters. FILE PHOTO: The logo for Canadian mining company Teck Resources Limited is displayed above their booth at the Prospectors and Developers Association of Canada (PDAC) annual conference in Toronto, Ontario, Canada March 7, 2023. REUTERS/Chris Helgren/File P
By Mrinalika Roy and Divya Rajagopal
(Reuters) – Canadian miner Teck Resources (NYSE:) said it was progressing “expeditiously” on the split of its coal and business after reporting a lower-than-expected quarterly profit on weak sales of steelmaking coal.
The company also trimmed its full-year production forecast for copper, steelmaking coal, and molybdenum, sending its shares down 6% in early trading.
Chief Executive Jonathan Price said supply chain disruptions like the British Columbia port strike and wildfires weighed on steelmaking coal sales and offset higher commodity prices in the third quarter.
Teck’s steelmaking coal sales were 5.2 million tonnes in the quarter, missing its forecast.
However, the company said strong demand, particularly from India and China, boosted steelmaking coal prices, which rose through the quarter and into October.
The steelmaking coal unit, Elk Valley Resources (EVR), is “well positioned to deliver strong financial performance in the fourth quarter”, the company added.
Teck reiterated that separation of its base metal and steelmaking coal businesses remains a “priority” and a decision is likely by the end of this year.
“In light of the improving outlook for met coal due to structural factors, we question whether a sale of EVR should be done at anything less than US$11bn,” Jefferies analysts said.
The company lowered its 2023 copper production outlook to the range of 320,000 to 365,000 tonnes, from 330,000 to 375,000 tonnes, while steelmaking coal production guidance was trimmed to 23 million to 23.5 million tonnes from 24 million to 26 million tonnes.
The company increased the capital cost guidance for its QB2 copper project in Chile but said it anticipates the project will generate profit in the current quarter.
Excluding items, the company reported an adjusted profit of C$0.76 per share for the three months ended Sept. 30, compared with the average analyst estimate of C$1.09 per share, according to LSEG data.