Canada-based coking coal miner Teck reported gross profit of $1.3 billion in Q4 compared to $1.6 billion in the same period a year ago. It also reported adjusted profit attributable to shareholders of $700 million in Q4, compared with $930 million a year ago for the same period. Annual adjusted profit attributable to shareholders for 2017 was $2.6 billion compared to $1.1 billion in 2016. Annual final profit attributed to shareholders was $2.5 billion in 2017, on record revenues of $12 billion, compared to $1.0 billion in profits the prior year. Teck said Q4 met coal sales were 8 percent lower than a year ago at an average price of $170/mt FOB British Columbia.
Teck is expected to sell 6.3-6.5 million mt of met coal in the first quarter of 2018, after sales fell to 6.4 million mt in Q4 2017 on transportation and process issues that interrupted operations in the coal dryer at Teck’s Elkview mine. Teck sold 5.9 million mt of met coal in Q1 2017.
In regards transportation, volume declined due to a Canadian Pacific Railway mainline derailment in November. In a statement, Teck added that underperformance at Westshore terminals in Roberts Bank has also continued into January from Q4. Teck has announced an investment of $68 million (CAD 85 million) to upgrade facilities at Neptune Terminal in Vancouver in 2018.
According to a press release on January 25, 2018 in regards the coal dryer, the problem is still ongoing and may not be fully resolved until late in February. At the time lost production was estimated at 200,000 mt with associated repair costs of up to $10 million.
Teck estimates output of 26-27 million mt of steelmaking coal in 2018. Production in 2019 to 2022 is expected between 26.5-27.5 million mt annually.
Teck added that spot index-linked quarterly-priced sales represent about 40 percent of its coking coal sales and PCI and semi-soft are negotiated on a quarterly benchmark basis.
Teck said it has received permits to start mining in new areas at the Fording River, Elkview, and Greenhills coking coal mines that will compensate for the closure of Coal Mountain.