TORONTO (miningweekly.com) – Canada’s largest diversified miner, Teck Resources, on Thursday said its third-quarter adjusted profit slid 41% year-on-year to C$252-million, or C$0.44 a share, compared with C$425-million, or C$0.73 a share in 2012, mainly as a result of lower coal, copper and zinc prices.

The Vancouver-based miner, however, beat analyst expectations of C$0.38 a share on revenues of C$2.25-billion.

Profit attributable to shareholders totalled C$267-million, or C$0.46 a share, in the third quarter ended September 30, compared with C$256-million, or C$0.44 a share. Profit was last year affected by a C$196-million after-tax charge for refinancing a portion of its debt.

Revenue remained flat at C$2.52-billion, compared with C$2.51-billion a year earlier.

Coal revenues in the third quarter remained similar to a year ago as significantly lower coal prices were mainly offset by a 36%, or two-million-tonne increase in sales volumes. Coal prices were down 28% at $139/t.

"The current price for steelmaking coal remains below what we believe is required to sustain adequate production in the industry in the long term,” president and CEO Don Lindsay said on an analyst conference call on Thursday morning.

Coal sales rose 36% to a quarterly record of 7.6-million tonnes, and the cost of coal sales before transport declined to C$50/t in the third quarter, compared with C$58/t a year earlier.

The company reported strong steelmaking coal demand from contract customers, sales to new customers, good spot sales, and a consistently strong performance of its logistics chain, including the expanded capacity at its Neptune Terminals, which contributed to increased sales in the quarter.

Teck said it had committed to sell 5.6-million tonnes of coal in the fourth quarter at an average price of $145/t.

Revenues from Teck’s copper business unit declined by C$49-million, mainly owing to lower copper prices and lower molybdenum revenues. Copper prices averaged $3.21/lb in the third quarter, a decline of 8% year-on-year.

Revenues from the zinc business increased C$57-million, owing to significantly higher zinc and lead sales volumes from Red Dog mine, in north-west Alaska.

Teck is currently focused on cost-reduction initiatives across its operations and with the current market conditions in mind, had identified more than C$330-million in early savings, and had made cuts of about C$300-million so far this year.

Lindsay said that while focusing on the cost reduction programme, Teck would reduce it sustaining capital spending and review the timing of its various development projects.

Teck had also delayed the development of some of its internal growth projects and had deferred capital spending. At its British Columbia-based metallurgical coal project, Quintette, it had delayed the final stage of development for the mine and would not start development until it saw a sustained improvement in demand for steelmaking coal.

The company had also slowed the development of the Quebrada Blanca Phase 2 copper project, in Chile, in part as a result of market conditions.

“While we believe that the longer term fundamentals for steelmaking coal, copper and zinc are favourable, the recent weakness in these markets may well persist for some time,” Lindsay said.

Teck shares were changing hands at C$30.78 on the TSX at noon, having gained C$1.37 apiece in morning trade.