On Dec. 5, Teck Resources (TECK) published its severe weather impact report for British Columbia, a Canadian province that has been affected by flooding, rain and mudslides. As of 09:41 am EST today, TECK stock dropped 1.71% in price.
Weather Impacts Rail Services
Rain and flooding have affected the company’s logistics in British Columbia. “Rail service between west coast terminals and Teck’s B.C. operations remains impacted by recent heavy rains and flooding, with both CN and CP operating at reduced levels following service interruptions.”
Weather Affects Steelmaking Coal Sales
Due to rail disruptions, Teck Resources now estimates that its fourth-quarter steelmaking coal sales will come in at 5.2 to 5.7 million tons. Prior estimates were in the 6.4 to 6.8 million ton range.
Rain and Wildfires Increase Transportation Costs
The company also noted that rain-related rail disruptions combined with previous wildfire impacts have added to inflationary pressures. Teck Resources now expects its 2021 full-year transportation costs to fall in the $44 to $46 per ton range, compared to a “previous guidance of $42 per ton or slightly higher for the year.” The firm did point out that these increased costs “are more than offset by continued strong steelmaking coal prices through the second half of 2021.”
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Teck is a diversified miner with coal, copper, zinc, and oil sands operations in Canada, the United States, Chile, and Peru. Metallurgical coal is Teck's primary commodity in terms of EBITDA contribution, followed by copper, zinc, and oil sands. Teck ranks as the world's second-largest exporter of seaborne metallurgical coal and is a top-three zinc miner. It is building a major new copper mine in Chile at the majority-owned Quebrada Blanca 2, in partnership with Sumitomo.
