The winter weather has hammered Teck Resources’ (TSX:TCK.B) ability to ship coal from its mines in B.C.
On Monday, the diversified mining giant lowered its coal sales guidance for the first quarter of 2011 to between 4.6 and 4.9 million tonnes.
That’s compared with an average of 5.3 million tonnes in the first quarter of each of the past six years, Teck said in a release.
“We’ve had some extremely bad winter weather here in B.C. … and that’s what’s impacted our guidance,” spokesperson Marcia Smith told Business in Vancouver.
There’s no word yet as to how the lower sales volumes will affect revenue in the first quarter, she added.
Last year, Teck raked in $790 million from its coal business in the first quarter, posting a $173 million operating profit.
But those figures came on the back of a realized price of US$140 per tonne of coal.
Thanks to ongoing demand from Asian steelmakers, prices are quite a bit higher in 2011.
According to Teck’s 2010 results, coal prices for the first quarter of 2011 are expected to be at or above US$225 per tonne, meaning the miner might still come out on top despite lower sales volumes.
First, however, the winter weather has to let up.
Teck said it has been dealing with more rail delays than usual due to avalanches and two recent derailments, as well as locomotive power failures and train length restrictions caused by the cold weather.
The company also said high winds and mechanical failures have affected operations at the ports.
Meantime, Teck has entered mediation with workers at its Elkview coal mine in southeast B.C., where strike action commenced January 31.
The company said the labour interruption has not affected coal sales so far this year.
At press time, Teck’s shares were down 4.5% to $48.64.