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Teck Resources cuts guidance for steelmaking coal; outage continues at Elkview mine

One day after announcing it will exit the oilsands business by selling its stake in the Fort Hills oilsands project, Teck Resources Ltd. said it continues to face inflationary pressures and production challenges at other sites around the globe.

Amanda Stephenson, The Canadian Pressabout 13 hours ago

The corporate logo of Teck Resources Limited is shown. THE CANADIAN PRESS/HO

One day after announcing it will exit the oilsands business by selling its stake in the Fort Hills oilsands project, Teck Resources Ltd. said it continues to face inflationary pressures and production challenges at other sites around the globe.

The Vancouver-based miner reported a loss of $195 million in its latest quarter as it took a $952-million one-time asset impairment charge related to the sale of its 21.3 per cent stake in the Fort Hills oilsands project to Suncor Energy Inc. 

The loss worked out to 37 cents per diluted share for the quarter ended Sept. 30, compared with a profit of $816 million or $1.51 per diluted share in the same quarter a year ago.

The approximately $1 billion oilsands deal with Suncor, which the two companies announced Wednesday evening, is part of Teck's strategy to improve its environmental performance by reducing its exposure to assets with a high carbon footprint and concentrate more on metals like copper and zinc.

In a conference call to discuss the company's third-quarter earnings Thursday, Teck CEO Jonathan Price said copper in particular is the heart of the company's strategy. Teck's massive new QB2 copper mine in Chile, which is expected to reach full production next year, will double the company's copper production. Price added Teck's asset portfolio contains other options to introduce copper output in years to come as well.

"We are rebalancing our portfolio of high-quality assets towards low-carbon metals, in particular, copper, where demand is expected to double by 2050, driven in large part by electrification and the low carbon transition," Price said on the call. "We intend to capitalize on this market opportunity while at the same time, reducing the proportion of carbon in our overall portfolio."

But while Teck is bullish on its new strategy and the role it believes it can play in meeting rising global demand for critical minerals and metals, the company acknowledged it's facing some short-term headwinds.

On Wednesday, Teck revised its construction capital cost guidance for the QB2 mine project to between US$7.4 billion and US$7.75 billion, up from its prior guidance of US$6.9 to 7 billion, due to the impact of foreign exchange rates and cost pressures related to weather and subsurface conditions and other factors.