Teck Resources Ltd. (TSX:TCK.B) reported a third quarter loss of $2.1 billion October 22, down from profit of $84 million in the same period last year, as low commodities prices have forced the miner to record several impairment charges.
The company had $2.2 billion in after-tax writedowns in the quarter. Most of this relates to a $1.5 billion impairment charge on its coal assets; the price of steelmaking coal has fallen by US$20 per tonne compared with the same period last year.
Other writedowns include $400 million on the company’s Fort Hills oil sands project and $300 million on copper.
“We are taking significant steps to meet the challenge of low commodity prices,” Don Lindsay, Teck president and CEO, said in a release.
Teck’s adjusted earnings and revenue, excluding the impairment charges, beat analyst estimates. Third-quarter earnings totaled $29 million, or 5 cents per share. In the same period last year, earnings were $159 million, or 28 cents per share.
Teck also noted it has reduced costs throughout the company and raised nearly $1 billion in two streaming transactions.
In April, the miner decided to cut its dividend to shareholders from $0.45 per share to $0.15 to weather weak prices that the company attributes to global oversupply.
A month later, it cut production and inventories of steel-making coal by suspending operations at its steelmaking coal mines for three weeks in the third quarter. It said production in the fourth quarter, which began October 1, would be aligned with sales volumes.
In August, Teck and Vancouver-based Goldcorp (TSX:G) said they would combine their Relincho and El Morro copper-and-gold projects in Chile in a joint venture.
In early October the company agreed to sell future silver production on its Antamina mine in Peru to Franco-Nevada (NYSE:FNV). The so-called streaming deal includes a $610 million upfront payment.
