Teck Resources’ third-quarter met coal sales of 6.7 million metric tons (mt) were 10% lower than a year ago and 100,000 mt below guidance. President and CEO Don Lindsay cited logistical issues at Westshore Terminals for causing the shortage, which affected its ability to deliver coal to customers.
“Demand remained strong and, accordingly, our third quarter sales would have comfortably exceeded our guidance of 6.8 million mt,” he added. “These logistical issues delayed the delivery of approximately 250,000 mt into the fourth quarter.”
While Westshore Terminals’ performance improved after the first quarter of 2018, year-to-date average vessel wait time is approximately five days longer than in 2016 and 2017, according to Teck. In the third quarter, vessel wait times at Westshore Terminals were approximately three days longer compared to the same period in 2016 and 2017.
The third quarter price index for steelmaking coal sold under quarterly contracts for Teck was $188/mt. Global steel production and demand for met coal continues to be strong, according to the company.
Teck’s third-quarter production of 6.4 million mt was 6% lower compared to the same period a year ago. This was largely the result of declining production at Coal Mountain Operations as the operation reached the end of its life and has concluded mining activity.
“Coal Mountain Operations will process its last mined coal in the fourth quarter,” Lindsay said. “For the balance of the year, we will continue to haul a portion of raw coal from the Elkview Operations to Coal Mountain Operations for processing to recover production shortfalls from earlier in the year.”
The business unit achieved total material movement in the third quarter of approximately 75 million bank cubic meters of material, a 5% decrease over the same quarter a year ago, due mainly to a reduction in contract mining.
“Equipment utilization and productivities are achieving historically high-performance levels, resulting in higher than expected total material moved in the third quarter,” Lindsay said. “Overall, this has led to an increase in raw coal inventories since the beginning of 2018 and improved our operational flexibility going forward.”
Lindsay said he believes Teck will make up for the shortfall throughout the remainder of the year to meet its production guidance, as most of the planned shutdowns are over.