Teck signs $95 million shipping deal, stock jumps
Teck Resources (TSX, NYSE: TECK) announced Wednesday that the company has signed a long-term rail agreement with CN (TSX: CNR) (NYSE: CNI) for the shipping of steelmaking coal from Teck’s four British Columbia operations between Kamloops and Neptune Terminals, as well as other west coast ports.
Under the agreement, which runs from April 2021 to December 2026, CN will invest more than C$125 million (about US$95m) to enhance rail infrastructure at Neptune Terminals. The deal would enable Teck to significantly increase shipment volumes from its Kamloops operations to expanded Neptune Terminals.
Teck CEO Don Lindsay said that the agreement and associated infrastructure investment would provide the company with the rail capacity to match the major upgrades currently underway at Neptune.
“We expect this will lower our total transportation costs and improve overall rail and terminal performance,” Lindsay added.
Neptune Terminals has the capacity to handle more than 24 million tonnes of bulk products a year. Following completion of the terminal expansion project, its capacity is expected to rise to 30 million tonnes.
Shares of Teck Resources rose just over 5% on Wednesday afternoon. The Vancouver-based miner has an C$11.6 billion market capitalization.