Teck Resources Ltd. posted another record quarterly profit Wednesday, putting the company in strong financial position as it gears up for the completion of its massive new QB2 copper mine in Chile later this year.
The Vancouver-based mining company reported first quarter earnings of $1.57 billion, up from $305 million as demand for its copper, zinc and steelmaking coal surged. It also benefited from higher crude prices through its stake in the Fort Hills oilsands mine.
The company said its profit amounted to $2.87 per diluted share for the quarter ended March 31, up from 57 cents per diluted share a year earlier.
Revenue totalled $5.03 billion compared with nearly $2.55 billion in the first three months of 2021.
Teck's copper revenue amounted to $930 million, up from $767 million a year earlier, as global copper prices reached an all-time quarterly average record. Zinc revenue was $920 million, up from $570 million, as zinc prices increased by 36 per cent to an average of US$1.70 per pound.
Steelmaking coal revenue totalled nearly $2.77 billion, up from nearly $1.05 billion a year ago, and energy revenue grew to $416 million, up from $163 million.
In a conference call with analysts, chief executive Don Lindsay said the record-setting results kickstart what is expected to be a "transformational" year for Teck.
Construction on the company's new flagship copper mine in Chile is now more than 80 per cent complete, Lindsay said, in spite of the significant impact of COVID-19's Omicron wave, which resulted in work force absenteeism rates approaching more than 20 per cent in the beginning of the quarter.
"We have to say we're very proud of this achievement," Lindsay said. "We expect first copper (production) from Line One in Q4 of this year, assuming no further Covid waves or other major disruptions."
Teck's QB2 mine project, located in what is one of the world's largest undeveloped copper deposits, is expected to double Teck's consolidated copper production by 2023, the company has said. Once up and running, the mine will produce 300,000 tonnes of copper equivalent per year for the first five years of its life.
Copper is used extensively in renewable energy installations and electric vehicle systems, so global demand is expected to increase as pressure to reduce carbon emissions intensifies in the coming years.
With the mine expected to come online later this year, Lindsay said Teck will be shifting from a period of significant capital investment to a period of significant cash generation. He said the company expects its capital spending to decline by nearly $2 billion year-over-year in 2023 due to the completion of the QB2 project.
This report by The Canadian Press was first published April 27, 2022.
Companies in this story: (TSX:TECK.B)
Amanda Stephenson, The Canadian Press