Teck Resources Ltd on March 9 confirmed the restart of the coal dryer at its Elkview Operations in British Columbia, Canada and provided updated guidance for estimated steelmaking coal sales volumes for 1Q18.
The coal dryer at Elkview Operations has been recommissioned following repairs to address damage caused by the January 2018 pressure event that suspended dryer operations. Commissioning is proceeding well and full commercial production is expected to resume early this week.
Lost production due to the pressure event is estimated to be approximately 200,000 tonnes of clean coal and the cost of repairs to the dryer is estimated at less than CAN$10 million, in line with previous estimates.
Steelmaking coal sales volumes for 1Q18 are now expected to be approximately 6 million tonnes, in comparison to previous guidance of 6.3-6.5 million tonnes. Sales continued to be adversely affected by logistics issues during the quarter, particularly ongoing poor performance at Westshore Terminals.
The 1Q17 price index for steelmaking coal volumes sold under quarterly contract on the basis of the average of three assessments for the period December 2017 through February 2018 is now established at CAN$236.73/t. Teck's average realised price for the first quarter will depend on market direction, product mix, the timing of sales and vessel arrivals, spreads between various qualities of steelmaking coal, the arbitrage between FOB Australia and CFR China pricing, and other factors.
(Writing by Becky Du Editing by Harry Huo)
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