Teck Resources has revised its H2 2020 guidance for the loss of production in the first half of the year due to prolonged mine shutdowns owing to the COVID-19 pandemic.
The revisions, Teck noted, were indicative of the uncertainty surrounding the impact of the pandemic on demand and prices for coking coal as well as metals.
It also plans to ramp up the construction of its Quebrada Blanca 2 (QB2) expansion project in Chile and bring it back to the pre-pandemic levels of operations by October, it said while reporting its Q2 2020 earnings. Apart from ramping up QB2, the company also plans to focus on increasing the margins in its steelmaking coal business even at the cost of volumes.
In H1 2020, the company produced 10mn mt of steelmaking coal against its 2020 guidance of 23-25mn mt. The company plans to produce around 11-12mn mt of coal in the second half of the year.
Consolidated copper production from Teck’s four mines stood at 130,000mt in H1 2020 against its 2020 estimates of 285,000-300,000mt. Copper production in H1 2019 stood at 147,000mt The company plans to produce around 145,000-160,000mt of copper in H2 2020 to remain within its 2020 guidance. In Q2 2020, copper production declined to 55,000mt from 77,000mt in Q2 2019.
Of the total copper produced, Teck sold 128,000mt in H1 2020, down from 151,000mt sold in the same period last year. It sold 55,000mt in Q2 2020, down from 77,000mt in the same quarter last year.
Teck’s refined zinc production remained unchanged in H1 2020 from the same period last year at 149,000mt, though zinc concentrate output dropped to 212,000mt from 285,000mt during the same period. Teck’s annual zinc production estimate stands at 600,000-645,000mt with H2 2020 output being estimated at 315,000-345,000mt.
In Q2 2020, the company’s refined zinc production declined to 70,000mt from 75,000mt during the same quarter last year, while zinc concentrate output almost halved to 84,000mt from 166,000mt during the same period.
Refined zinc sales were flat at 150,000mt in H1 2020 compared with the same six months last year, while quarterly sales for the product fell to 70,000mt from 75,000mt in Q2 2020. Zinc concentrate sales declined to 227,000mt in H1 2020 from 234,000mt during the same period last year and declined to 93,000mt in Q2 2020 from 95,000mt in the same quarter last year.
Zinc output is expected to improve in Q3 as the company plans to return the Red Dog mine to full production during the quarter.
The company reported a loss of CA$461mn ($343.81mn) in H1 2020 compared with a profit of CA$861mn during the same six months last year. In Q2 2020, the company reported a loss of CA$149mn compared with a profit of $231mn in the same period in 2019.