Mining News: News Nuggets: Weak metal prices weigh Teck profits

Teck Resources Ltd. April 21 reported first-quarter adjusted profit attributable to shareholders of C$64 million, or C11 cents per share, compared with C$105 million, or 18 cents per share, in 2014. The company attributes the lower profits to challenging commodity markets, which was partially offset by a stronger U.S. Dollar. “Our ongoing focus on cost management and operational performance, aided by the strong U.S. dollar, is enabling our diversified business to withstand the generally weak commodity price environment, allowing all of our operations to generate positive operating cash flows after our sustaining capital spending,” said Teck President and CEO Don Lindsay. The company says prices for steelmaking coal have fallen further since the beginning of the year and the market for steelmaking coal remains oversupplied, primarily due to indications of weakening demand in China. Copper prices dipped sharply in the quarter but rebounded substantially towards the end of the period with prices averaging US$2.64 per pound compared with US$3.19 per pound in the previous year. Zinc was the one bright spot on the commodities front. LME zinc prices averaged US94 cents per pound in the first quarter of 2015, 2.5 percent higher than the same period last year. Zinc prices reached a low of US90 cents per pound on March 17 as global oil and commodity prices fell, but recovered to US$1.01 per pound in early April. Lead prices, however, are down 14 percent, averaging US82 cents per pound. As a result of stronger zinc prices, U.S. dollar strength and increased sale volumes from the Trail refinery in British Columbia, gross profit before depreciation and amortization for Teck’s zinc unit was C$179 million, a C$58 million increase compared with results of the first three months of last year. Mill throughput at Red Dog was similar to the first quarter of 2014. Zinc grade and recoveries at the Northwest Alaska mine during the first three months of this year, however, were slightly lower than 2014, resulting in 4 percent less zinc production. Higher lead grade than 2014 was partially offset by lower recoveries, which yielded 4 percent more lead production at Red Dog.

- Shane Lasley

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