Canadian miner Teck Resources beat second-quarter profit estimates on Wednesday, on the back of higher production volume from its Quebrada Blanca copper mine in Chile and increase in prices of the red metal.
Prices of copper used in power and construction remained high during the June quarter amid bets for interest rate cuts and supply worries, briefly hitting an all-time high in May.
Teck said copper prices rose by 15% from a year earlier and averaged $4.42 per pound. Quarterly copper production saw a 71% jump from a year earlier, partly due to the ongoing ramp-up of operations at the QB mine.
However, the company cut its full-year copper production guidance to 435,000 tonnes to 500,000 tonnes due to an expected fall in QB mine output amid “short-term access issues related to pit de-watering and a localized geotechnical issue”.
US-listed shares were down 1.3% at $45.2 premarket.
The company said it is working on a plan to have the QB mine operating at full capacity by the end of 2024.
Earlier this month, Teck said it had completed the sale of its remaining 77% interest in the steelmaking coal business to Swiss miner Glencore Plc. The deal was announced last year, as Teck looks to build its copper business.
The company said its board authorized up to a $2.75 billion share buyback using the proceeds from the sale of the steelmaking coal business.
“Divestiture of the remaining steelmaking coal business has provided significant cash to bolster the balance sheet ahead of delivering the next leg of copper growth,” NBCFM analyst Shane Nagle said.
On a diluted basis, the company reported an adjusted profit of C$0.79 ($0.5729) per share for the quarter ended June 30, compared with analysts’ average estimate of C$0.73 per share, according to LSEG data.
($1 = 1.3790 Canadian dollars)
(By Mrinalika Roy and Surbhi Misra; Editing by Krishna Chandra ELuri and Subhranshu Sahu)
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