Copper price extends gain on Chinese recovery while US election looms
Prices climbed as much as 0.9% after China’s monthly services activity expanded at the fastest pace since July.
Teck Resources Ltd. (TSX: TCK.B) (NYSE: TCK), Canada’s second-biggest diversified miner, became the latest casualty of the ongoing commodity prices slump as it posted Thursday a significant drop in profit for the second quarter and announced that it’s shelving major projects in Canada and Chile.
The Vancouver-based company logged Q2 adjusted profit of $197 million, nearly half of what it achieved in the same period last year.
The firm decided to delay Phase 2 of the Quebrada Blanca copper mine in Chile and the start of production at its Quintette coal mine in British Columbia. Teck has also increased its cost reduction target to $300 million, up from the previous target of $250 million.
Teck, one of Canada’s largest coal producers and an important player in the copper and zinc sectors, said it has already implemented $220 million of the original cost reductions and has identified an additional $80 million.
“We are pleased with our operating performance this quarter and have made good progress on our cost reduction program. However, prices for our products have continued to weaken, particularly steel making coal,” Teck president and CEO Don Lindsay said in a statement.
Second-quarter net income declined to $143 million, or 25 cents a share, from $354 million, or 60 cents, in the same period last year.
Sales fell to $2.15 billion from $2.56 billion, beating the $2.08 billion average of 15 estimates.
Copper revenue declined $38 million, coal revenues decreased $360 million and revenues from the zinc business unit remained similar to a year ago.
