Teck Resources, a Canadian mining company, reported better-than-expected profits for the second quarter, driven by increased production from its Quebrada Blanca (QB) copper mine in Chile and rising copper prices.
During the June quarter, copper prices surged by 15% year-over-year, averaging $4.42 per pound, amid concerns over supply and speculation about potential interest rate cuts. Teck’s quarterly copper production experienced a significant 71% increase compared to the previous year, largely due to the ongoing ramp-up of operations at the QB mine.
However, the company has revised its full-year copper production guidance down to between 435,000 and 500,000 tonnes, citing anticipated decreases in output from the QB mine due to “short-term access issues related to pit de-watering and a localized geotechnical issue.”
Despite the positive earnings report, U.S.-listed shares of Teck fell by 1.3% to $45.20 in premarket trading. The company is focused on a plan to achieve full operational capacity at the QB mine by the end of 2024.
Earlier this month, Teck completed the sale of its remaining 77% stake in its steelmaking coal business to Glencore Plc, a move aimed at strengthening its copper business. The board has authorized a share buyback of up to $2.75 billion using proceeds from this sale. Analyst Shane Nagle noted that this divestiture has provided significant cash to enhance the company’s balance sheet ahead of further copper growth.
For the quarter ending June 30, Teck reported an adjusted profit of C$0.79 ($0.5729) per share, exceeding analysts’ expectations of C$0.73 per share.