Canadian miner giant Teck Resources (TSX:TCK.B) reported Thursday a record annual profit of $2.7 billion, up by half from 2010, fuelled mainly by higher coal prices.
The Vancouver-based miner said it registered the most substantial increase in its fourth-quarter, with an adjusted profit of $613-million, or $1.04 a share. In 2010, Teck earned $512-million, or $0.87 a share, in the same quarter.
“2011 was another strong year for Teck. Higher average commodity prices combined with strong operating results contributed to new records for each of revenue, gross profit, profit and cash flow from operations,” president and CEO Don Lindsay said in a statement.
“We ended the year with $4.4 billion in cash, which puts us in a strong position to advance our various expansion projects,” he added.
Vancouver-based Teck is one of the world's top exporters of metallurgical coal, used to produce steel. The company, which owns mines spread across Canada, the United States, Chile and Peru, is also a large producer of copper and zinc.
Quarterly revenue rose 9.4% to C$2.97-billion, as a 27% increase in coal prices helped offset declines in the prices of copper, zinc and lead.
Gross profit from Teck's coal business rose 42% to C$781-million, even though prices have pulled back from record levels hit earlier in 2011. The company said it had realized an average coal price of US$253 per tonne in the fourth quarter.
Teck said it had already reached agreements with its customers to sell 5.3-million tonnes of coal in the first quarter at an average price of US$230 per tonne. The company expects to conclude additional sales over the course of the quarter.
Despite recent volatility registered in commodity markets drove by traders’ concerns of an economic slowdown in China and a double-dip global recession, Teck’s forecast is optimistic. The miner said it continues to expect “volatile” markets for its products, but insisted that the long-term fundamentals remain strong due to the industrialization of emerging economies.
In January, Teck signed a deal to buy SilverBirch Energy Corp. (TSXV:SBE) for C$435 million, snagging full ownership in two oil sands projects and spinning out the rest into a new junior company.
The deal gives Canada’s largest publicly traded mining company the Frontier and Equinox projects. It also grants Teck access to a nearby property called Twin Lakes, while the spin-out firm, to be called SilverWillow Energy Corp., will take a handful of early-stage properties.