Proactive Investors - Coal, of course, for Teck Resources (TSX:TECKa) Ltd (TSX:TECK.B) is now branded as “steelmaking” coal, as if that was any better or worse than other types of coal.
Nevertheless, it was the brighter spot in terms of the company’s 2023 guidance, which was met in neither of its other two core production areas – copper and zinc.
During 2023, a slower-than-expected ramp up at the new QB2 project meant that initial expectations of between 320,000 and 365,000 tonnes of copper were not met. Instead, Teck produced a more modest 296,500 tonnes.
The big miss was at QB2, which fell short by more than 25,000 tonnes, but trend watchers should note that production at Highland Valley and Carmen de Andacollo also fell short, and only the 22.5%-owned Antamina project hit targets.
What does this say about Teck? Hard to say at this stage, but note that it’s the coal division that’s being divested, the one that’s actually doing well.
Meanwhile, zinc production at Red Dog also underdelivered, but at Antamina, targets were met, as above.
Times are tough in mining.
Chinese demand has been unpredictable and often soft over the past 18 months or so, as the world has emerged from Covid.
Still, for this year, the copper guidance is substantially higher, allowing for the completion of the QB2 ramp up. Unit costs are also projected to be higher.
Which brings us to the main point.
These are production numbers, and they’re not that great. But it will be the financials that will demonstrate how much of a miss this really is.