Teck lowers 2023 copper production forecast

Teck Resources Ltd. (TECK.B-TSX, TECK.A-TSX, TECK-NYSE) has lowered its annual copper production outlook due to delays at its QB2 copper project in northern Chile.

The announcement is contained in the company’s 2023 second quarter results, which were released this morning. Teck reported adjusted second quarter adjusted earnings per share of $1.22.

“In the second quarter we achieved another major milestone at our QB2 project with the first sale of copper concentrate as we ramp up to full production later this year,’’ said Teck CEO Jonathan Price. Line 1 is operating and Line 2 is in commissioning.

But due to construction and commissioning, our 2023 annual production guidance for QB2 has been updated to 80,000-100,000 tonnes, Price said.

As a result, the company’s overall copper production guidance has been revised down to between 300,000-375,000 tonnes from 390,000 to 445,000 tonnes due to lower QB2 production, he said.

Meanwhile, the company said it continues to expect to be operating at full production rates by the end of 2023. Previously disclosed capital cost guidance for QB2 remains unchanged at between US$8.0 billion and US$8.2 billion.

Teck is a diversified miner with coal, copper, zinc, and oil sands operations in Canada, the U.S., Chile and Peru.

It ranks as the world’s second-largest seaborne exporter of steelmaking coal, with six operations in Western Canada and significant steelmaking coal reserves. They include Elkview, Fording River, Greenhills and Line Creek in southeastern British Columbia.

At full production, QB2 is expected to double Teck’s copper production on a consolidated basis. Ranking as one of the world’s largest undeveloped copper resources, it has an initial mine life of 27 years using only approximately 18% of the 2022 reserves and resource tonnage with significant potential for future growth.

Thursday’s second quarter release contained no update on the strategic review of Teck’s coal business.

Teck shares eased 3.2% or $1.85 to $55.67 on volume of 1.49 million. The shares are currently trading in a 52-week range of $66.04 and $33.43.

In a press release on July 12, 2023, Teck’s Trail Operations in British Columbia said it has received $10 million in funding support from the Government of B.C.’s  CleanBC Industry Fund to progress the advancement of its Carbon Capture Utilization and Storage (CCUS) pilot plant.

The company said the carbon capture pilot plant construction activity is underway, and the CleanBC funding will advance the assessment of viable options for carbon utilization and/or sequestration of the captured carbon dioxide (CO2) from Trail Operations.

The CCUS pilot project supports Teck’s climate action strategy, including the goal to reduce the carbon intensity of operations by 33% by 2030 and become a net zero operation by 2050. The CCUS pilot is expected to begin operations late this year.

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