© Reuters. FILE PHOTO: The logo for Canadian mining company Teck Resources Limited is displayed above their booth at the Prospectors and Developers Association of Canada (PDAC) annual conference in Toronto, Ontario, Canada March 7, 2023. REUTERS/Chris Helgren/File P
By Mrinalika Roy and Divya Rajagopal
(Reuters) – Teck Resources (NYSE:) was progressing “expeditiously” on a split of its coal and businesses, the Canadian miner said on Tuesday, after missing quarterly profit estimates on weak sales of steelmaking coal.
The company also trimmed its full-year production forecast for copper, steelmaking coal, and molybdenum, sending its shares down 7%.
Chief Executive Jonathan Price said supply-chain disruptions like the British Columbia port strike and wildfires in several Canadian provinces pressured steelmaking coal sales, trimming gains from higher commodity prices.
Steelmaking coal sales were 5.2 million tonnes in the third quarter, falling short of the company’s 5.6 million tonnes to 6.0 million tonnes forecast.
However, prices of the commodity rose through the quarter and into October on strong demand, particularly from India and China, the company said.
Teck reiterated that separation of its base metal and steelmaking coal businesses remains a “priority” and a decision is likely by the end of this year.
“In light of the improving outlook for met coal due to structural factors, we question whether a sale of EVR should be done at anything less than US$11bn,” according to a report from brokerage Jefferies.
After withdrawing its plan to split its copper and coal business earlier this year, Teck in October said it was aiming to make an announcement by the end of 2023.
The company has received several proposals for the steelmaking coal business, called Elk Valley Resources (EVR). These include a revised offer from Swiss trading and mining firm Glencore (OTC:), whose $22.5 billion offer for the Canadian miner was twice rejected.
Teck lowered its 2023 copper production outlook to a range of 320,000 to 365,000 tonnes, from 330,000 to 375,000 tonnes, while steelmaking coal production forecast was cut to 23 million to 23.5 million tonnes from 24 million to 26 million tonnes.
The company increased the capital cost guidance for its QB2 copper project in Chile but said it anticipates the project will generate profit in the current quarter.
Excluding items, Teck reported third-quarter adjusted profit of C$0.76 per share, compared with estimates of C$1.09, according to LSEG data.
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