Teck cuts costs.
Teck Resources is currently implementing cost reduction programs across its operations designed to reduce a minimum of $200 million from annual operating costs. The Red Dog 2012 shipping season was successfully completed October 19, 2012, with all available concentrates being shipped. Zinc concentrate shipments totaled 950,000 mt and lead concentrate totaled 175,000 mt. During the quarter, Teck reduced coal production to align with declining market demand. However, it expects annual production will meet the lower end of its guidance of 24.5 million mt for 2012.
"The uncertainty in global economic conditions resulted in lower commodity prices and sales volumes of steel-making coal compared with the third quarter of 2011. However, our quarterly operating results continued to be strong with another quarterly record for copper production at 99,000 metric tons (mt), up 29% from the third quarter of last year. Our balance sheet remains strong. Notwithstanding our strong financial position, some of our planned capital spending has been deferred for a variety of reasons and we have also implemented a cost reduction program," said Don Lindsay, president and CEO.
To date, Teck has reached agreements with its coal customers to sell 6.2 million mt of coal in the fourth quarter of 2012 at an average price of US$163/mt. Teck expects to conclude additional sales over the course of the quarter.
Copper production increased 29% from the third quarter of 2011 to a record 99,000 mt in the third quarter, which reflects investments Teck has made at the Antamina, Carmen de Andacollo and Highland Valley Copper Operations. With the increase in copper production in the third quarter total cash costs, before by-product credits declined by 6%, and cash costs net of by-product credits, declined by 5% from the second quarter of 2012 to US$1.69/lb.
Approximately $1.5 billion of expected capital spending is being deferred from the original 2012 and 2013 capital budgets, which includes: reduced capital spending for Quebrada Blanca Phase 2 and Quintette due to permitting delays for each project; a delay in the Relincho project as a result of external factors related to power and port facilities; a delay in the development of Fort Hills as its partner updates the design basis for the project; and a deferral of the construction of the Number 4 slag fuming furnace at Teck's Trail Operations.
|Printer friendly Cite/link Email Feedback|
|Title Annotation:||NEWS-LEADING DEVELOPMENTS; Teck Resources Ltd.|
|Publication:||E&MJ - Engineering & Mining Journal|
|Date:||Nov 1, 2012|
|Previous Article:||Cynthia Carroll resigns as Anglo CEO.|
|Next Article:||World Gold Council publishes Conflict-Free Gold Standard.|