Teck expects minimal coal export impact from Westshore issue

Teck Resources Ltd. (TSX: TCK.A and TCK.B, NYSE: TCK), Canada’s largest producer of metallurgical coal, said Dec. 21 that coal sales for the fourth quarter of 2012 are expected to exceed prior guidance of 6.2 million tonnes, and production for the first quarter of 2013 is not expected to be materially impacted by the damage to Berth 1 at Westshore Terminals.

Teck said it will use alternative shipping options throughout the duration of the repairs at Westshore, including securing additional capacity through Neptune Terminals, Pacific Coast Terminals, Thunder Bay Terminals and Ridley Terminals. On the basis of Westshore’s estimated repair schedule for Berth 1 and expected loading capacity for Berth 2, Teck expects to have total shipping capacity of approximately 6 million tonnes in the first quarter of 2013.

These are all export terminal facilities along the Pacific Coast of British Columbia.

Any expected shortfall in first quarter shipping capacity is not expected to materially affect first quarter production as there is additional inventory capacity and the potential to secure further shipping capacity at the terminals, Teck noted. Incremental demurrage and transportation costs due to the damage at Westshore are not expected to exceed C$2 per tonne for the first quarter of 2013. Further guidance on production and sales will be provided as usual in Teck’s next quarterly earnings report.

On Dec. 7, the ship Cape Apricot ran through the trestle at Berth 1 at Westshore, rendering ship loading at Berth 1 impossible for the balance of the year and likely into mid to late first 2013, Westshore said on Dec. 13. In the meantime, operations at Berth 2 will continue and Westshore said it will work with its customers and the railroads to reduce the impact as much as possible.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.