VANCOUVER (miningweekly.com) – Canada’s largest diversified miner Teck Resources has reported a remarkable jump in headline earnings for the three months ended June, with the company's steelmaking coal division benefiting from higher prices and sales volumes.

Adjusted profit attributable to shareholders in the period under review was an eye-popping C$577-million, or C$1.00 a share, compared with C$3-million, or C$0.01 a share, in the same period last year.

The Vancouver-headquartered company explained that the substantial increase in profit in the second quarter was also positively affected by higher base metal prices as well as the weaker US/Canadian dollar average exchange rate, compared with a year ago.

Revenues jumped 62% over the same period of 2016 to C$2.82-billion.

In commodity markets, prices moved higher year-on-year, with copper, zinc and lead prices rising 20%, 35% and 26%, respectively, from the same period a year earlier.

Teck’s realised steelmaking coal price in the second quarter doubled from a year earlier and averaged $169/t. Steelmaking coal spot prices retreated from above $300/t in mid-April – after Cyclone Debbie disrupted key Australian supplies – and are now trading above $170/t. The higher commodity prices combined with increased sales volumes for most of Teck's principal products, including record second-quarter sales of 6.9-million tonnes of steelmaking coal, contributed to the company's improved financial results compared with a year ago.

Steelmaking coal production rose to a second-quarter record of 6.8-million tonnes, up from 6.1-million tonnes in the first quarter of 2017, and also exceeded the 6.7-million tonnes produced in the second quarter of 2016. However, steelmaking coal unit costs rose because of high input costs and a management decision to advance normal plant maintenance shutdowns, originally planned for later in the year.

As expected in the mine plans, copper output in the second quarter rose 9% from the first quarter to 70 000 t as grades at Highland Valley Copper, in British Columbia, improved.

Teck’s zinc-in-concentrate output rose by 8% from the first quarter to 158 000 t, because of record zinc output from Antamina copper/zinc mine, in Peru.

Meanwhile, construction progress on the Fort Hills oil sands project, in Alberta, has passed the 92%-completion mark. Four of the six significant project areas have now been turned over to operations. The project remains on track to produce first oil in late 2017.

Teck also advised that it had established a new dividend policy that better reflects its commitment to return cash to shareholders, balanced against the needs and opportunities to invest in the business, as well as the inherent cyclicality of the underlying businesses. The policy will be anchored by an annual base dividend of C$0.20 a share, which Teck intends to declare and pay quarterly, commencing in the third quarter of this year.

The C$0.10 base dividend declared and paid in the second quarter of 2017 reflects the quarterly dividends for both the first and second quarters of 2017.

While Teck expects coal sales of at least seven-million tonnes in the third quarter of 2017, it has narrowed the top-end of its full-year guidance to the range of 27-million to 27.5-million tonnes. The unit cost of sales are expected to range between $49/t to $53/t, up from the group's previous guidance of $46/t to $50/t.