Teck Resources Ltd. says it remains committed to rebalancing its portfolio toward less carbon-intensive resources even though soaring prices for steelmaking coal helped push the miner to a record fourth-quarter profit.
Surging global commodity prices lifted Teck to a fourth-quarter profit attributable to shareholders of nearly $1.49 billion compared with a loss of $464 million a year earlier, the company reported Thursday.
The Vancouver-based miner said the profit amounted to $2.74 per diluted share for the quarter ended Dec. 31, compared with a loss of 87 cents per diluted share in the last three months of 2020.
Revenue for the quarter totalled $4.41 billion, up from $2.56 billion a year earlier.
On an adjusted basis, Teck said it earned a record $2.54 per diluted share in the fourth quarter, compared with an adjusted profit of 46 cents per diluted share in the fourth quarter of 2020.
Analysts on average had expected an adjusted profit of $2.38 per share and $4.44 billion in revenue, according to financial markets data firm Refinitiv.
Record realized steelmaking coal prices of US$351 per tonne drove a $1.4 billion gross profit increase in Teck’s steelmaking coal business unit, Teck said.
But chief executive Don Lindsay told analysts on a conference call that the company, which has set a goal of reaching net-zero carbon emissions by 2050, intends to reduce its exposure to coal moving forward.
He said that will begin this year, as construction of Teck’s massive new QB2 copper mine in Chile is more than three-quarters complete and production is expected to begin in the second half of 2022. The mine is expected to produce 300,000 tonnes of copper equivalent per year for the first five years of its life.
“Both coal and oilsands will be a lower percentage of the portfolio, whether you measure it in terms of revenue or EBITDA,” Lindsay said. “We love the (coal) business. As you can see, it’s a tremendous cash generation business . . . But the coal part of it will reduce in proportion naturally as copper grows.”
Teck, which holds a 21.3% interest in the Fort Hills oilsands mine in northern Alberta (with Total E&P Canada Ltd. and Suncor Energy Inc. holding the remaining interest), has indicated it may be interested in selling its stake in that project. Lindsay said the company is better poised to make a decision on that front now that Fort HIlls has resumed two-train operations.
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