Teck trades lower following mine explosion

Shares in Teck Resources (TSX: TCK.A, TCK.B) (NYSE:TCK) dropped on Monday by 1.08% as reactions poured in following an explosion at its Elkview coal mine, located near Sparwood, British Columbia.

What the company dubbed as “a significant pressure event at the dryer” took place Wednesday afternoon in an area where coal is dried using a natural gas heating system. Interviewed by the Times Colonist, the president of United Steelworkers Local 9346, Alex Hanson, said that workers reported seeing a fireball being shot through vents in the sides and roof of the building.

However, in a media statement, Teck said no casualties were registered. “There were no adverse health or environmental impacts. Work is ongoing to assess the extent of the damage and the potential impact on production.”

But, according to The Free Press, workers want more detailed information. The media outlet cites Steve Kallies, Vice President and Health and Safety Chair for USW Local 9346, who said that the union has partnered with third-party experts and Teck management in order to determine the root cause of the accident. “Our union is deeply concerned for the health and safety of all the workers at our worksite,” he told the weekly newspaper.

In the meantime, Elkview is operating at a reduced production rate using unaffected facilities. “It is too soon to estimate the extent of any downtime or loss of production as a result of the event,” Teck’s brief reads.

The incident at the mine site, CIBC World Markets analyst Oscar Cabrera told the Times Colonist, “could cut Teck's metallurgical coal production this year by 13 per cent to about 23.7 million tonnes, while mining and logistics costs will likely rise by about $1 per tonne and capital spending might increase by $100 million.”

Elkview is one of the five steelmaking coal operations owned by the Vancouver-based company in B.C.’s Elk Valley.