Coal news and updates

Teck Resources says China coal demand weakens; cuts dividend

Chinese demand for steel-making coal has weakened with imports for the first two months of 2015 well below last year's levels, the chief executive of Canadian miner Teck Resources Ltd said on Tuesday as the company announced lower earnings and a big dividend cut.

Whether the Chinese weakness will continue is unclear, CEO Don Lindsay said, adding that indications from customers are that the drop is "unusual" and that demand could rebound.

"We'll have to see how the year unfolds, but certainly it has been weak so far," Lindsay said on a conference call after Teck reported weaker-than-expected first-quarter earnings and cut its dividend by 67 percent.

Vancouver-based Teck is the world's second-biggest exporter of seaborne steel-making coal. The company also produces copper and zinc.

Teck said coal demand outside of China remained strong.

Teck shares were down 5 percent at C$16.05 after it slashed its half-yearly dividend to 15 Canadian cents a share from 45 Canadian cents.

It is the first time Teck has cut its dividend since it halted payouts in late 2008, when it was trying to reduce a mountain of debt following its purchase of Fording Canadian Coal Trust.

Teck warned in February it could reduce the dividend if industry-wide cuts in the production of steel-making coal failed to lift prices from historically low levels.

INTEREST IN COPPER

On merger and acquisition prospects, Lindsay said Teck has a "long-term interest in copper". Although asset prices have come down, there was a lot of competition for them from private equity groups and other mining companies, he said.

"We're actively looking but truthfully there's not a lot out there," he said.

Last month, Teck poured cold water on speculation that it was in talks to merge with, or acquire, Chilean copper miner Antofagasta Plc.

Weaker coal and copper prices caused Teck's net profit to dip to C$68 million ($55.5 million), or 12 Canadian cents per share, for the first quarter ended March 31 from C$69 million a year earlier.

Excluding items, the company earned 11 Canadian cents per share, below analysts' expectations of 14 Canadian cents, according to Thomson Reuters I/B/E/S.

Teck said average realized prices for coal fell 19 percent to $106 per tonne in the quarter, while average realized prices for copper fell more than 17 percent to $2.64 per pound.

($1=$1.225 Canadian)

source: http://in.reuters.com