14 March 2011

Teck Slashes Coal Sales Guidance

Vancouver British Columbia - Teck Resources Ltd. slashed its first-quarter coal sales guidance by 13 percent after unusually bad winter weather triggered avalanches that caused railway delays, and cold weather resulted in locomotive power failures and train length restrictions.
 
Teck said Monday it now expects coal sales in the first quarter to be between 4.6 million to 4.9 million tonnes.
 
This compares to an average of 5.3 million tonnes of sales in the first quarter of each of the last six years.
 
At the low end the output drop would be about 13.2 percent.
 
In addition to the weather delays, two recent non-weather related derailments, and other mechanical issues have affected rail transport, the company said.
 
Moreover, operations at Neptune Terminals and Westshore Terminals have been affected by high winds and mechanical failures, which have affected coal transportation, restricting sales.
 
Teck said a strike at its Elkview coal operations has not been a significant contributor to the reduction in sales as deliveries from inventory continue, although slower rail loading times at Elkview have also affected rail cycle times.
 
"Teck is working closely with its rail and port service providers to address these issues and to implement measures intended to enhance rail and port performance, including increasing train sets and slots, adding cars per train, and adding crew," the Vancouver company said in a release before stock markets opened.
 
"Teck expects performance to improve in the second quarter as a result of these measures assuming more normal weather conditions."
 
Teck is a diversified miner focused on copper, steel making, coal, zinc, and energy.