Copper production at Teck, Canada’s largest diversified mining company, increased 74% in the first three months of the year, mainly due to the expansion of its Quebrada Blanca mine in Chile.
Significant increase in production
In the first quarter, Teck produced 99,000 tonnes of copper, of which 43,300 tonnes came from the new area of the mine, known as QB2. The latter began production three years later than planned due to weather and construction disruptions caused by the Covid-19 pandemic, resulting in cost increases on the project.
Teck highlighted that all major construction at QB was completed in the first quarter, including the ship loader and molybdenum plant, which will come online in the second quarter. Additionally, the company made the first shipment of concentrate from its newly completed port facilities.
“We had a strong first quarter performance across all of our businesses, generating $1.7 billion of adjusted earnings, with quarterly copper production steadily increasing as QB expansion progresses,” CEO Jonathan Price said in a statement.
Production and cost objectives
Teck reiterated its full-year copper production target, which ranges between 465,000 tonnes and 540,000 tonnes, well above the 296,500 tonnes produced in 2023.
Additionally, the company left its capital cost guidance for QB2 unchanged, which is estimated at $8.6 billion to $8.8 billion.
“The investment case for Teck largely depends on the company meeting QB2’s revised expansion timelines and cost guidelines,” Jefferies analysts wrote in a note to investors. “The completion of construction and the reiteration of guidelines are encouraging.”
Farewell to coal
Last year, Teck agreed to sell its coking coal business, a top producer, to Swiss miner Glencore (LON: GLEN), and focus on expanding its copper operations.
Coking coal production reached 6 million tonnes, matching 2023 levels due to the impact of low temperatures in January. This caused the freezing of plant components and unplanned operational stoppages. Teck sold 5.9 million tons of metallurgical coal in the quarter, less than a year earlier.
Teck missed first-quarter profit estimates, partly due to weak coking coal sales and declining zinc prices.
It reported earnings of $0.76 per share, missing analysts’ average estimate of C$0.85 per share, according to LSEG data.
Total revenue was C$3.99 billion, up from C$3.79 billion in the first quarter of 2023.
