Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Zinc and lead production at Teck Resources is expected to decline gradually through this year and next, while its copper and steelmaking coal outputs are projected to increase during the same period.


The company, which produced a total of 640,000mt of zinc from its Red Dog, Antamina, and Pend Orielle mines, has kept its zinc production outlook for 2020 flat at 600,000-640,000mt, and reduced it to 590,000-640,000mt in 2021. The miner produced around 103,000mt of lead in 2019 and lowered its 2020 guidance to 95,000-100,000mt before reducing it further to 80,000-90,000mt in 2021.


On the other hand, Teck’s total copper production, which stood at around 297,000mt—from its Highland Valley Copper, Antamina, Carmen di Andacollo, and Quebrada Blanca mines—is expected to increase to 285,000-300,000mt in 2020 and yet more to 590,000-640,000mt in 2021.


The company lowered its Q1 2020 guidance for steelmaking coal after its sales were impacted by harsh weather disruptions in British Columbia, as well as by annual maintenance to some of its plants H1 2020. It anticipates around 23-25mn mt of steelmaking coal output in 2020, slightly below its actual output of 25.7mn mt in 2019, before increasing to 26-27mn mt in 2021. 


The Canadian miner pegged its unit cost for steelmaking coal at around $103-110/mt (US$77.91-83.21/mt) in 2020, while its net cash cost units for copper are estimated at $1.25-1.35/lb and at 40-45¢/lb for zinc.


In 2019, the company’s steelmaking coal sales volumes declined to 25mn mt from 26mn mt during the year prior, while its copper sales rose to 301,000mt from 292,000mt in 2018. Refined zinc sales dropped to 284,000mt in 2019 from 304,000mt during the previous year, while sales volumes for zinc concentrates increased to 649,000mt from 644,000mt in 2018.


The company’s adjusted EBITDA for 2019 decreased to $4.3bn from $5.4bn in 2018. The company posted an adjusted EBITDA of $649mn in Q4 2019 compared with $1.3bn during the same period the year prior. 


($1 = CAD$1.321)

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