Teck eyes copper production increase in 2023

Teck Resources Ltd. (TECK.B-TSX, TECK.A-TSX, TECK-NYSE) is forecasting a substantial increase in copper production this year as the company ramps up its world class QB2 copper project in northern Chile.

Teck said it expects to produce between 390,000 and 445,000 tonnes of copper this year, marking an increase from 270,500 tonnes in 2022. The company said QB2 is expected to add substantially to overall copper production compared to 2022 as the operation ramps up to full capacity before the end of 2023.

However, the expected increase is partially offset by lower expected production at the Highland Valley Copper operation in British Columbia, where production in 2022 was impacted by a temporary pit closure that resulted from a localized geotechnical event, as well as extreme weather.

Forecasts for 2023 also reflect lower copper grades at the Antamina operation in Peru, the company said in a press release.

Copper production from 2024 to 2026 is expected to be between 545,000 and 640,000 tonnes.

Teck production and guidance numbers were released after the close of trading on January 30, 2023 when the company’s Class B common shares closed at $55.35. The shares are currently trading in a 52-week range of $57.50 and $32.68.

Teck is a diversified miner with coal, copper, zinc, and oil sands operations in Canada, the U.S., Chile and Peru.

It ranks as the world’s second-largest seaborne exporter of steelmaking coal, with six operations in Western Canada and significant steelmaking coal reserves. They include Elkview, Fording River, Greenhills and Line Creek in southeastern British Columbia.

“Like others in the industry, we continue to face inflationary cost pressures, which have increased our operating costs compared to prior years,’’ Teck said in a press release. “The increase in cost of certain key supplies, including mining equipment, fuel, tires and explosives, are being driven largely by price increases for underlying commodities such as steel, crude oil, and natural gas.

“While our underlying key mining drivers such as strip ratios and haul distances remain relatively stable, inflationary pressures on diesel and other key input costs, as well as profit-based compensation put upward pressure on our unit costs in 2022 and are expected to persist through 2023,” the company said.

However, the company said construction capital cost guidance for QB2 remains unchanged from a third quarter update.

Teck said its 2022 annual production was within the previously disclosed guidance range for zinc in concentrate, while copper, refined zinc and steelmaking coal production came in slightly below the low end of the company’s guidance range.

Refined zinc production of 248,900 tonnes in 2022 reflects an extension of major planned maintenance activities on the KIVCET boiler at the Trail Operations in British Columbia and unplanned downtime due to extreme cold weather in December.

Steelmaking coal production of 21.5 million tonnes reflects a two-month outage at Teck’s Elkview operations, also in B.C. Production there was also impacted by extreme weather.