Canadian miner Teck Resources Ltd said on Tuesday Chief Executive Officer Don Lindsay will step down after 17 years in the role, and also posted forecast-beating quarterly profit on upbeat prices for steelmaking coal.
Lindsay, who will step down by end-September, will be replaced by Jonathan Price as CEO while Harry Conger has been appointed president and chief operating officer.
The Vancouver British Columbia-based company also posted profit attributable to shareholders of C$1.68 billion ($1.31 billion) in the second quarter, a more than six-fold jump from year-ago levels.
Steel production and demand for steelmaking coal was strong through most of the second quarter before market conditions began to weaken last month, with steelmaking coal prices exiting the quarter at $300 per tonne, Teck said.
Steel and steelmaking coal are required for multiple purposes – from clean energy projects such as wind or solar power to transportation alternatives like rapid transit, buses and hybrid vehicles.
Average price steelmaking coal in the reported quarter jumped 215% to $453 per tonne from year-ago levels, the miner said.
Still, the company added that global steelmaking coal prices are affected by reduced downstream steel demand as weakening auto production and global inflationary pressures weigh on market sentiment.
Miners have been battling higher operating costs related to labor, energy and supply, with global miners BHP Group and Rio Tinto flagging that labor crunch and inflationary pressures would continue into 2023.
Inflationary woes have increased Teck’s operating costs by 14% year-on-year, of which about half relates to an increase in diesel costs.
Teck cut its annual steelmaking coal production outlook to between 23.5 million and 24 million tonnes, below previous forecast of 24.5 million to 25.5 million tonnes, citing workforce challenges experienced in the first half of the year.
On an adjusted basis, the miner reported a profit of C$3.25 per share, compared with an estimate of C$3.20 per share, according to Refinitiv data.
($1 = 1.2868 Canadian dollars)
(Reporting by Akriti Sharma and Arunima Kumar in Bengaluru; Editing by Sherry Jacob-Phillips)