Tsunami hurts Teck’s coal projections

Japan’s tsunami and nuclear meltdown has hurt Teck Resources Ltd.’s ability to ship coal to customers, the company revealed in June.

B.C.’s second largest company ranked by revenue (see “Top 100 companies in B.C.” – issue 1130; June 21-27) said in a release that coal shipments in its second quarter will be at the low end of guidance: 5.5 million to 6 million tonnes.

Japan’s disaster damaged steel mills in the Asian nation and forced the mills to shut down, thereby limiting the mills’ need for coal.

Teck (TSX: TCK) also told investors that it expects the unit mining cost of coal to be in the $71- to $76-per-tonne range as a result of one-time costs related to labour settlements and higher than expected costs for items such as external mining contractors and diesel.

The average selling prices of its coal for the second quarter will be approximately US$270 per tonne, compared with existing guidance of US$280 to US$290 per tonne.

The lowered guidance is directly a result of changes in the sales mix related to the deferred shipments to Japan.

Teck’s shares have endured a battering so far this year, falling by about one third. The company has been doing well to weather the economic downturn that saw its stock price plunge from about $50 in June 2008 to $3 in December 2008.