Diversified Canadian miner Teck Cominco expects earnings from its copper and coal businesses will rise to their highest levels ever in the next year, as demand from China and other emerging economies continues at a galloping pace.

CEO Don Lindsay said that he did not expect a falling off in demand, despite the prospect of an economic slowdown in the US, and that the global supply of most commodites was likely to miss forecasts.

“There's more than a reasonable chance that ...our copper and coal businesses alone will generate record earnings for Teck Cominco ...so the next 12 months look pretty good,” Lindsay said on Tuesday.

“Generally, we think that supply will be tighter than people forecasting, and demand will carry on.”

The copper price, which recently topped a record $4/lb, had had a “considerable impact” on the group's earnings during the first quarter, Lindsay said on a conference call.

“Operating profit in the first quarter of 2008 was driven by the strength of our copper division,” he commented.

The company has increased its exposure to the metal - with copper contributing 70% of first-quarter operating profit, compared with 47% a year ago - and will continue to do so as it expands mines and builds new ones, CFO Ron Millos said.

Teck Cominco announced last week that it would buy the Relincho copper/molybdenum project, in Chile, from fellow Canadian Global Copper, increasing the group's measured and indicated copper resources by about 25% on a contained copper basis.

The Relincho project was "very doable...very buildable", Lindsay said, as it was located at a relatively low altitude and near existing infrastructure.

Besides Relincho, Teck Cominco has two other large-scale greenfield copper projects in the pipeline – the Galore Creek copper/gold project, in British Columbia, Canada, and the Petaquilla project in Panama, where it agreed last month to exercise its right to buy a 26% stake.

Lindsay said that, at Galore Creek, where Teck and its partner NovaGold halted construction in November because of skyrocketing costs, he was “very pleased” with the results to date of a review of plans to develop the mine.

“Design models they are working on now I think are a much better way to go... the decisions we've made have been the right ones for the benefit of the project long term,” he said.

The company expects to be in a position to make further announcements on Galore Creek in September.

COAL

Realised coal prices were expected to rise over the next 12 months, as higher contract prices, which are negotiated for the year beginning April 1, take effect.

Teck still had not made a decision on whether it would change its holding in Fording Canadian Coal or the Elk Valley Coal partnership.

The group increased its stake in Fording to about 20% in September last year, bringing its effective interest in metallurgical coal miner Elk Valley to around 52%.

Fording, which owns 60% of Elk Valley, said in December that it was considering “strategic options”, which could include the sale of assets or putting the trust itself up for sale.

It has made no announcements since, except to say that the process is “ongoing”.

“At this point its very difficult to to say what we would do. We could be a buyer, we could be a seller or we could hold our current position,” Lindsay said on Monday.

“No decision has been made at this point.”

CURRENCY, ZINC KNOCK EARNINGS

Teck Cominco shares fell 1,88% on Tuesday, to C$47,37 a share by 14:16, after the firm reported net earnings of C$345-million for the first quarter, compared with C$360-million a year earlier.

Profit was affected by a 17% increase in the value of the Canadian dollar versus the US currency, as well as zinc prices, which were 30% lower in US dollar terms and 40% lower in Canadian dollar terms.

However, operating profit from the group's copper division rose to C$435-million in the quarter, compared with C$292-million in the first quarter of 2007.

The increase in profit was primarily a result of higher copper prices and the acquisition of the Quebrada Blanca, Andacollo and Duck Pond mines in August 2007, the firm said.

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