Teck's profits drop 22 pct
Due to weak coal and copper prices, Teck's gross profits in 2014 were $2.9 billion compared with $3.7 billion in 2013, a 22% decline.
"In U.S. dollar terms, annual coal and copper prices in 2014 were down 23% and 6%, respectively, compared to 2013, and 23% and 7% on a quarterly basis compared with last year," writes Teck (NYSE:TCK) in its fourth quarter results for 2014.
"Sales volumes of coal and copper were also lower in 2014 than in 2013, which, combined with lower prices, reduced gross profit for both of these business units."
The bright spot was zinc with gross profits up 50% due to a 13% increase in the price and strong production from Red Dog Mine.
Looking forward, the company says that cost reduction is its focus.
Despite low oil prices the company will continue to develop its Fort Hills oil sands project, and it expects development costs to drop.
"We believe that this will reduce budget and schedule pressure on the Fort Hills oil sands project, as there will be less competition for skilled labour and contract services."
Low oil prices have been a boon for the company's mines.
"At current exchange rates, each US$1 change in the price of a barrel of oil has an approximate $5 million effect on our operating costs."