“Teck expects 2009 coal sales to be at the upper end of the previously announced range of 18 to 20 million tonnes,” the company said, adding that it anticipated 5Mt in the second quarter and more than 6Mt in the third quarter.

“Significant increases in sales to China contribute significantly to Teck's increased confidence in higher sales volumes,” the company said.

“Previously planned temporary production shutdowns at several mines have now been cancelled in order to meet the increased demand.”

In the meantime, the producer has wrapped up negotiations with more than 80% of its regular customers and set pricing at $US128 per tonne for its premium coal – a figure Teck said was consistent with previous settlements.

About 2.3Mt of its carryover tonnage this year has been committed to customers at last year’s prices.

The upped sales and production for the remainder of 2009 is expected to significantly reduce operating costs, as the per tonne impact of fixed costs is lowered.

Teck said that factor represented about a quarter of the cost structure.

The company’s strip ratios will also be down by an estimated 25% in the year’s second half compared to the first.

For the year overall, the producer is anticipating a sales cost of $C53-56/t.

Transportation costs will be reduced, as the transportation contracts are linked to coal prices.

“A new contract with Canadian Pacific Railway has not been reached for transportation from the five mines in the Elk Valley to west coast ports, but required service continues to be provided,” the company noted.

For the year, the company expects transportation costs of $C35-37/t.