INTERNATIONAL COAL NEWS

Teck shaves full-year sales guidance on strike, weather

TWO months after slicing its first-quarter sales outlook, Canadian producer Teck Resources has cu...

Donna Schmidt

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“As a result of the ongoing labor disruption at our Elkview operation and unusually difficult winter weather conditions which have impacted production and shipments in the first quarter, Teck now expects coal sales in 2011 to be between 23.5 and 24.5 million tonnes,” it said Tuesday afternoon.

This is up to 1Mt lower than the Vancouver-based company’s previous 2011 sales outlook.

Due to the lower volumes, the unit mining cost of product sold will now be $63-67 per tonne for the whole year and $77-80/t in the first quarter.

The newest guidance does not consider further production losses from an ongoing labor dispute at the Elkview mine in British Columbia; crews walked off the lines in January and late last week rejected a new collective agreement with the union. It also does not reflect any other potential labor disruptions from other operations.

The company also sliced its annual copper sales range to 330,000-340,000t, resulting from unusual and heavy rainfall at its Quebrada Blanca operation and continued ore throughput issues at the Carmen de Andacollo operation. The reduction will mostly affect its first-quarter results with expected copper production for the period estimated at 75,000t.

“As a result of the recent earthquake and tsunami in Japan, Teck has carried out an initial review with our customers and currently expects minimal impact to the shipment of our core commodities of copper, steelmaking coal and zinc to Japan,” the company said.

In January, Teck cited avalanche hazards near its rail line and mechanical problems at its primary port terminal for projected first-quarter shortfalls in coal sales.

CP Rail issued a force majeure notice January 17 reporting avalanche conditions in and around the Rogers Pass area of the province which were affecting the movement of coal rail loads.

Earlier, on January 12, Teck’s main port facility, Westshore Terminals, announced it had a mechanical failure which was expected to shrink the port’s capacities for two weeks or more.

The weather also put a wrinkle in the recommissioning of the Greenhills mine coal dryer and shipping of wet coal.

Teck’s guidance for whole-year sales at that time was 24.5-25.5Mt, assuming no further labor disruptions and the prompt resumption of rail service.

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