Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Teck Resources announced improvements to its steelmaking coal business unit during February and March, bringing its Q1 steelmaking coal sale estimates up to 5.6mn mt from 4.8-5.2mn two months ago.


The firm’s adjusted cost of sales is approximately $65/mt, below initial expectations. Teck is assuming a $150/mt average benchmark for metallurgical coal throughout the year.


Finished coal inventories at its mining sites declined during the quarter, adding to its cash flow and increasing operational flexibility. 

Teck anticipates improved market conditions. Construction on its Neptune facility is expected in Q1 2021, with new double dumper equipment commissioned the following quarter. Its Elkview operations, which are expanding from 7mn mt to 9mn mt, are expected online by mid-April. 


Construction at the Quebrada Blanca Phase 2 (QB2) copper project in Chile was suspended on March 18, as reported by Davis Index, with no timeline for when it will be restarted. In December 2018, the QB2 capital cost was estimated at $5.2bn, however, now it’s $3.9bn, with Teck’s remaining cash contribution at $880mn. Production launch was anticipated for Q2 2022, but it will be revised due to COVID-19. Presuming construction is suspended for four weeks, the estimated impact is estimated $75-125mn.


Teck is a Canadian diversified resource company in mining and mineral development with focuses on copper, steelmaking coal, zinc, and energy.

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