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Teck Resources Ltd Class B TECK

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Buoyant Commodity Prices Lift Teck Resources’ Profit Despite Cost Pressures

Mathew Hodge, CFA Regional Director

Analyst Note

| Mathew Hodge, CFA |

No-moat Teck Resources performed strongly in the second quarter of fiscal 2021 given the backdrop of elevated commodity prices. Relative to the same period last year, copper and steelmaking coal prices were 81% and 26% higher, respectively, with Teck realising average prices of USD 4.40 per pound and USD 144 per tonne. Teck achieved production targets and higher sales volumes for these key commodities, delivering a gross profit of CAD 689 million--an over fivefold rise on the same COVID-19-affected quarter last year. Higher prices across all products more than offset the negative impact of the strengthening Canadian dollar, inflationary cost pressures, weaker zinc sales, and bitumen production.

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Company Profile

Business Description

Teck is a diversified miner with coal, copper, zinc, and oil sands operations in Canada, the United States, Chile, and Peru. Metallurgical coal is Teck's primary commodity in terms of EBITDA contribution, followed by copper, zinc, and oil sands. Teck ranks as the world's second- largest exporter of seaborne metallurgical coal and is a top-three zinc miner. It is building a major new copper mine in Chile at the majority-owned Quebrada Blanca 2, in partnership with Sumitomo.

550 Burrard Street, Suite 3300
Vancouver, BC, V6C 0B3, Canada
T +1 604 699-4000
Sector Basic Materials
Industry Other Industrial Metals & Mining
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 10,000