Teck outlines deal to use wind power in coal shipping
Teck Resources Ltd. (TSX-TECK.B, TSX- TECK.A, NYSE-TECK) has announced details of an agreement with Oldendorff Carriers GmbH & Co. KG that is designed to utilize wind power in shipping, a move that will reduce the carbon footprint of the mining giant’s supply chain. Oldendorff is a family-owned shipping company with a fleet of about 700 bulk carriers.
The joint investment will see the vessel Dietrich Oldendorff, which carries shipments of Teck steelmaking coal from the Port of Vancouver, outfitted with a Flettner Rotor system by mid-2024.
The Flettner Rotors generate lift from the wind, which is translated into additional thrust, thereby reducing fuel consumption on voyages across the Pacific. The addition of the rotors, along with other emission savings measures, is expected to reduce emissions by 55% resulting in an annual reduction of over 17,000 tonnes of Co2 emissions, equal to removing 3,500 gasoline-powered passenger vehicles from the road.
Since the November 2021 announcement of the start of Teck and Oldendorff’s joint efforts to reduce supply chain emissions, Teck said an estimated 115,000 tonnes of C02 emissions have been eliminated, the equivalent of removing over 25,000 gasoline-powered passenger vehicles from the road.
“This innovative agreement to utilize wind power in shipping will reduce the carbon footprint in Teck’s supply chain and help advance the development of green transportation corridors,’’ said Teck President and CEO Jonathan Price.
Teck 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.
Steelmaking coal – or metallurgical coal – is a higher-grade coal which is a necessary component in the chemical reactions that transform iron into steel.
Coal production is currently shipped via three B.C. west coast ports including Ridley, Neptune and Westshore Terminals. Located in Delta, British Columbia, Westshore Terminals is Canada’s premier coal export terminal and handles over 33 million tonnes of coal annually.
Teck recently agreed to sell its entire interest in its steelmaking coal business, Elk Valley Resources (EVR) via sale of a majority stake to Swiss metals trading giant Glencore Plc and a minority interest to Nippon Steel Corp. for an implied enterprise value of US$9.0 billion.
Subject to the approval of the Canadian government, the Vancouver metals giant said the sale of the steelmaking coal business achieves a simple and complete separation of steelmaking coal from base metals.
“This transaction will be a catalyst to re-focus Teck as a Canadian based critical minerals champion with an extensive portfolio of copper growth projects, unlocking the full value potential of the company,’’ said Price.
On Thursday, Teck’s Class B common shares rose 0.84% or 42 cents to $50.27. The shares trade in a 52-week range of $66.04 and $44.70.