Teck Resources Limited (TSX: TECK.A and TECK.B, NYSE: TECK) (“Teck”) confirmed the restart of the coal dryer at its Elkview Operations Friday and provided updated guidance for estimated steelmaking coal sales volumes for the first quarter of 2018.
The coal dryer at Elkview Operations has been recommissioned following repairs to address damage caused by the January 2018 pressure event which suspended dryer operations. Commissioning is proceeding well and full commercial production is expected to resume early next week. Lost production due to the pressure event is estimated to be approximately 200,000 tonnes of clean coal and the cost of repairs to the dryer is estimated at less than $10 million, in line with previous estimates.
Steelmaking coal sales volumes for the first quarter of 2018 are now expected to be approximately 6 million tonnes, in comparison to previous guidance of 6.3 – 6.5 million tonnes. Sales continued to be adversely affected by logistics issues during the quarter, particularly ongoing poor performance at Westshore Terminals.
The first quarter 2017 price index for steelmaking coal volumes sold under quarterly contract on the basis of the average of three assessments for the period December 2017 through February 2018 is now established at US $236.73 per tonne. Teck’s average realized price for the first quarter will depend on market direction, product mix, the timing of sales and vessel arrivals, spreads between various qualities of steelmaking coal, the arbitrage between FOB Australia and CFR China pricing, and other factors.
– From Teck Resources