TORONTO – With two weeks until it releases quarterly earnings, Teck Resources can’t seem to catch a break.

The miner’s steelmaking-coal sales are threatened by heavy rain, snow and mudslides. Costs to build a new shipping terminal in British Columbia to get its goods to market are running over budget. And its base-metals business is facing not-yet-quantified, but potentially significant, risks from China’s coronavirus outbreak.

MET COAL
About half of Teck’s revenue came from steelmaking coal in 2018. On Wednesday, the company said first-quarter sales for the segment this year will be hurt by brutal weather on Canada’s west coast in January. Snow, extreme cold, and rock and mud slides affected rail lines and highways while heavy rain delayed repairs, the company said in a statement. Teck forecast the impact will be a one-million ton drop in metallurgical-coal sales in the period.

Teck fell 2.8% to C$18.48 at 9:37 a.m. in Toronto, bringing its decline this year to 18%.

CAPEX
The coal news came just a week after CEO Don Lindsay told analysts the cost to build its Neptune shipping terminal has soared far above expectations. Meanwhile, mechanical problems at its Elkview coal mine in British Columbia will mean higher costs there in the first quarter, he said.

As for market concerns about possible cost overruns at QB2, Teck’s flagship copper project in Chile, the miner will disclose definitive capital expenditure estimates for the expansion project at the end of March, Lindsay said. He should probably stop talking about a “QB3” expansion of the Quebrada Blanca project, he said candidly, and just focus on demonstrating that QB2 will be fine, after some hurdles in 2019, amid Chilean protests. “Things are starting to look like they’re proceeding according to plan.”

CORONAVIRUS
The potential impact of coronavirus, which has infected more than 28 000 people in China so far, is the biggest unknown for Teck and its peers. About 16% of Teck’s revenue came from China in 2018, including about 10% of the company’s steelmaking coal sales.

This week, a group of steel mills in four provinces in China said they plan to cut steel production 30% as a result of the virus. Provinces representing most of the country’s copper smelting have extended a Lunar New Year closure by more than a week to deal with the virus. Copper is Teck’s third-largest revenue generator, and zinc, which is used to galvanize steel, is second.

“There has been no material impact on shipments of Teck products to China,” a Teck spokesman said by email. “We are closely monitoring the situation, with our first priority being the health and safety of employees.”