Teck copper output shoots up on QB mine, profit disappoints
Teck Resources (TSX: TECK.A, TECK.B)(NYSE: TECK), Canada’s largest diversified miner, saw its copper production jump by 74% in the first three months of the year, thanks mainly to the ramp up of the extension at its Quebrada Blanca (QB) mine in Chile.
The Vancouver-based miner churned out 99,000 tonnes in the first quarter, with QB producing 43,300 tonnes. QB2, as the new area of the mine is known, began production three years after originally planned, due to weather and covid-19 construction disruptions. In the process, the key growth project saw costs balloon.
Teck noted that all outstanding major construction at QB was completed in Q1, including the shiploader and the molybdenum plant, which will be ramped up in the second quarter. The company also marked the first shipment of concentrate from its completed new port facility in the period.
“We had strong first quarter performance across our business, generating $1.7 billion of adjusted earnings, with steadily increasing quarterly copper production as QB ramp-up advances,” CEO Jonathan Price said in the statement.
The Antamina mine in Peru and Highland Valley copper mine in Canada, also had a strong performance, Price said.
The miner reiterated full-year copper production of between 465,000 tonnes and 540,000 tonnes, well above the 296,500 tonnes it produced in 2023.
It also kept QB2’s project capital cost guidance unchanged at $8.6 – $8.8 billion.
“The investment case for Teck is very much dependent on the company hitting the revised ramp-up timeline and capex guidance at QB2,” Jefferies analysts wrote in a note to investors. “The completion of construction and reiterated guidance is encouraging.”
Waving goodbye to coal
The company, one of the top coking coal producers, agreed to sell that business last year to Swiss miner Glencore (LON: GLEN) and focus instead on expanding its copper operations.
Production of steelmaking coal hit 6 million tonnes, matching 2023 levels due to the impact of severe freezing temperatures in mid-January. This led to plant components freezing and unplanned operational halts. Teck sold 5.9 million tonnes of metallurgical coal in the quarter, down from 6.2 million tonnes the previous year.
Teck missed first-quarter profit estimates, partly due to weak sales volumes of steelmaking coal and declining zinc prices.
It reported earnings of $0.76 per share, which was lower than the average analyst estimate of C$0.85 per share, based on LSEG data.
Revenue totalled C$3.99 billion, up from C$3.79 billion in the first quarter of 2023.