- Earnings call transcript Q3 2022

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to Teck's Third Quarter 2022 Earnings Release Conference Call. [Operator Instructions]. This conference call is being recorded today, Thursday, October 27, 2022. I would now like to turn the conference over to Fraser Phillips, Senior Vice President, Investor Relations and Strategic Analysis. ahead. go Please

Fraser Phillips

may morning, any Teck's Good our note you joining Slide the the and for call Teck for to Thanks, not X statements. does Quarter everyone. statements. Please XXXX forward-looking for assume uncertainties risks Various Third forward-looking to Please underlying actual Results us results contains vary. update Ariel. obligation statements. Thank cause forward-looking Conference assumptions today's to Call. refer

follow call reference MD&A progress begin from quarter, then In Jonathan reconciliations non-GAAP on press various explanations in addition, CFO, the this priorities. operational be our Red and Conger, CEO, provide today's on these throughout our in release update Chile; will Interim highlights. on color comments President and strategic copper can measures will will operational we with including Price, Crystal our website. the regarding with and and growth a measures will focus flagship additional latest Officer, Chief QBX call our on found our our project and Prystai, the highlights financial Operating

We questions. that, turn will period call a with the to With over Jonathan. I'll any address conclude session to today's remaining question-and-answer

Jonathan Price

articulation Teck for years, confidently is I been one current of In of say Having It's the a foundation and as position X expect you, and morning, excited meetings any on part the existing strong to I drive assume ahead investors, strategy build sustainable recent changes strategy our success. and the good with development asked our should Thank long-term whether to CEO for shareholder role address the you past opportunity Fraser, to can for today of the pleasure everyone. I've strategy the by as I'm value. Teck. they Tech tech right been long-term the the to CEO. company of

from generating remain next growth portfolio And our with our the production production. to growth. growth copper Now full current Slide our our add together reaches options strategy copper remainder will is of our double on the of of attractive equivalent it to copper focused profile. turning amount year. QBX has the heart Xx value potential We consolidated industry-leading when X. of The production copper

the are to high-quality metals, in portfolio while by we our particular, our Secondly, double XXXX, at is carbon carbon towards overall driven where of reducing capitalize in time, low-carbon expected market this rebalancing demand electrification of in low on opportunity assets We the proportion and by portfolio. intend part transition. large the copper, to same

demonstrated execution global the economic all on of activities backdrop with strategy focused our Together of the team, of maintaining navigate processes balance we against Third, remain fully this shareholders strong believe allocation of entire and uncertainty Teck balance we our and are to between as our levels values, and our we build have core continue committed purpose returns ensuring a advantage. investment right capital will to year, it competitive strong on strike growing a shareholders fully Sustainability positioned cash and Sustainability sustainability to capital By be record. to we into we and while responsibly, this finally, continue the while To And is will end, track growth sheet. we our integrated can view our framework. our balance weather will are periods I we market as volatility. to business well we returning organization. as the in uncertainty. I at growth this to to

asked been about also my I've CEO. priorities recently, by investors as Now

growth outlined our strategy. Slide continue As X, advance on top my to is copper to priority long-term

metals will we ramp-up high-quality of we the our to rebalance the copper projects. doing overall project portfolio. suite QBX priority in of our build low-carbon the in as In carbon immediate of advance so, proportion reduce Our capacity organization and our and completion portfolio is to

finally, excellence, to remain and operational laser-focused deployment long-term including performance of And technologies. digital we autonomy deliver work on maintaining the committed as our on we we're us and through driven to these Second, to returning industry-leading collectively, And demand sustainability our targets. net shareholders. for capital transition copper will growing position priorities meet global zero significant to short- by our while the

undertook approvals. strategy for the most to billion copper conditions, yesterday, Mexico. Suncor resulting growth high-quality copper Suncor, highest zinc to Now a sale of portfolio realize assets which subsidiary, transaction transactions. comparable pipeline. transactions closing announced North and of our project long-range industry-leading gross and of The PolyMet the options a in Met to approximately of business advance will an of the quarter. all Hills giving agreement Teck the Further, development the with It mineral significant advance advances cash. of and our crystallize our sell effective shareholders. Glencore value Fort on the pathway equity to customary XX, Nicolas, interest a Fort San Masaba Eagle reflected important shares retains growth in for in-depth is Agnico in that these with we deposit line pursuing proceeds with agreement value the consistent energy of July Domain interest XX.X% including announced in the in we provide announced will to the San an with we positions and is San our to the by an in low-carbon that a end, is Closing to from USD Eagle in project XX, September is copper million plan the Together, And transactions agreement our number we Eagle Agnico executed evaluate current to recent conducted Nicolas. our an subscribe outlook to project Zacatecas, for to in rebalancing value process $X review first majority derisk extensive Agnico our On interest subject Hills assets receipt metals. for Minnesota. just in culmination we in on their of XXX our regulatory our and XX% The Nicolas

we agreement, charge sales an after-tax in recorded the the impairment of approximately noncash result quarter. a million $XXX As third of

the in X. framework We is will approvals. use February XXXX. will November including in sale of capital be of effective of proceeds our to agreement customary allocation regulatory accordance subject The Closing receipt review with the conditions,

$X.X in to our billion, was strong, a commodity overall strength turning profit despite and and $X.XX attributable key profit Now was on shareholders a while we billion adjusted share debt to economic diluted continued X. on $X.X meaningful all QX through with Year-to-date, $XXX highlights remained prices or to returned financial million the million billion results dividends, outstanding. shareholders of was increase have from $XXX $X.X buybacks Gross our results, third due our in the the $X.X XXXX. and third paying quarter Adjusted down quarter to billion starting amortization slowdown. Overall, through billion primarily per EBITDA depreciation before of Slide basis. $X.X

of we to all the quarter, at grinding a to climate a action of will advancing the Collaborating our commissioning Neptune guidance at Line detailed net boats system, of important transportation business tug copper. and our Crystal providers our minutes. of are electric run-through of Subsequent including the our testing significantly X beginning desalination critical transmission achieved mills, path strategy QBX, provide supports X by milestones deploy plans updates on of the transportation commissioning with preoperational which of power zero goal number our we plant the XXXX. announced During quarter, Terminals. of performance green develop in corridors to first emissions and of and a part few is

on X. changes However, X Slide I want highlight key to

for to pressures and have First, revised factors. conditions prior related our on to weather exchange QBX, Based subsurface is increase X.X X USD and to billion. USD other X.X cost construction capital USD to cost billion. guidance X.XX foreign of This an assumptions billion USD from current our our billion we guidance

from target X to late this We year. continue line copper first

if However, this impacts into XXXX. will productivity be January delayed persist,

production abrade mechanical First of be blanket commissioning XXXX, mechanical in per XXX,XXX copper XXX,XXX XXXX. for X, will of expected continuous of to of XXXX up to of per the the through lower range previous QBX. with range guidance tonnes XXXX ramp XXX,XXX now production which tonnes copper between to up with year year and expect part QB Line compared at copper range. Line end following by We the X XXXX followed is completion and to over completion commissioning XXX,XXX ramp is production plan and the of

Second, for X-year steelmaking production our coal, we have guidance. updated

is levels for XX Valley production in most X at operated and Elk million and to XXXX between we those of million across operating approximately had the the coal steelmaking period XX XXXX. Our capacity our mines tonnes,

to in ability reliability X years, external operate and disruption our to coal These challenges events past largely levels. including plant upview as chains control ongoing those the recently, as XXXX rain, impacted well pandemic our over include out COVID have and flooding, our However, severe the events of associated challenges weather-related at and availability. extreme at more the wildfire challenges labor and supply

As XX in reduced from risk a X-year million million to associated XX of we impacts million of adverse operations, and result, previously. reflect our to better million commencing increasing XX to events guidance to tonnes frequency XX these tonnes the have our XXXX production to

XXXX Third CapEx. finally, for our and outlook

to reduction pressures, XXXX continue our anticipate to QBX expect we in of we to increase inflationary capital XXXX than guidance continued for projected spending the billion longer While levels. as with lower $X be expenditures a compared XXXX, capital and no

We With from on operational manage well to it staying some in near-term will focused our I positioned issue strength, our quarter. growth and expenditure provide that, pressures we guidance will to third resilience financial February as strategy. through any to now remain thanks pass Overall, capital XXXX highlights the copper over usual. Red our while to

Harry Conger

and unplanned that address View, are an I Jonathan. on the update inflationary outage Teck. failure deliver conveyor a as doing today we give seeing QBX, building belt on organizational you plant and you pleasure and announced Slide at COO them, about pressures XX. our today are capacity strategy; including a you, September what It's the growth copper President to Thank [indiscernible] of of want We at to on plant XX. the to progress to Moving structural a our we Elk

to has this team importantly, multidisciplinary result steelmaking incident. is this has and on processing activities been of this at are -- has our halted all complete the XX/X have feed A up coal been plant have continued. areas no tube from working Most mining site, While the and people of some and across were running. plant. we assembled Emulation way well as this of our we and reinstated injuries on the the organization, a to getting best access of back supports there

necessary in labor conveyor tube refabricated to the at and a complete all Montana the conveyor now replacement. and team modifications. The of sections place source substantially commissioning and have weeks, of on able and conduct restart shop to been undergoing sections to on production we Delivery a next X a have and the are components and to We tube is support completed the ore schedule schedule transported take materials to and the fabrication sourcing November. late over was in tube plant are plan

to estimate to We million production continue of of approximately steelmaking reduction be a in XXXX. the X.X impact tonnes coal

Slide XX. to Moving

-- to similar in We year of and increased the we our operating on the by pressures period with a costs. XX% capital like pressures the last our have inflationary period others uncertainty. compared in cost are business, industry, continue Across persistent operate same to

the supplies, grinding key labor natural media for of supplies gas as be the our significant for and experience many to steel, inflation explosives, period slowing, are including when being the census price of rate driven rate mining well Increases to in the appears inflation increases oil we crude to by last year. largely compared in as increases equipment, commodities cost price of continue same and transportation. key of underlying While

have underlying costs. While unit diesel remain prices inflationary costs other increased input pressures stable, our relatively drivers on and our mining

we to controllable focused we're higher on input managing adapt keenly costs. prices, our As

efficiencies date plants equipment between mines digital related through interruptions We our our have load to processing initiatives operational across our steelmaking maintenance drill reduce and equipment the and utilizing maximize to interconnect race business. enteral realized successfully logistical programs, applications and have teams savings sensors and perspective, downtime Neptune and of predictive improvement results productivities continuous and a mines, by reduce initiatives, operations costs our and tangible we and throughput our reducing from increasing in to blast with cost driven In operations. tech full planning our initiative costs improvement a has Terminal. operations logistics From unit

car addition, train at XX%. River In has loading loading floating and speed automated Forty increased by per by X%

production term. targets pressures more us enable to our long and structurally which for and the current will stable Going the reduce cost forward, we of to continue further will inflationary to improvements, costs drive healthy future achieve impact

Turning to #XX. Slide

As process, realize wave In we from strategy. delivery. capacity extension copper of of role enabler it our operations. and be worldwide of development, as end, responsible suite organizational a responsibility are copper Teck's the value of we this project progress and appointed next over execution is building of gold of that existing new Copper to as Tyler copper role, that will actively advance new we Vice the Tyler directly Vice project President work expansion Tyler broad Senior the our to line key the or Tyler ahead commissioning Exploration. brings construction This dotted growth he mine Development life for our reports to has Hooper, assets Growth, Mitchelson our as growth effective prioritizing experience X. execution, well a copper Nick President, to our To Corporate with of July and Senior me to

Turning an Slide on XX. QBX on to starting update

We made and focused of we the on are remain the very steady over. through progress proud completion have and quarter system

In completed the of testing commissioning at main the gear substations terms key the the kV have we transmission and of concentrator. system XXX final of achieved, switch milestones

of At and been launder. advanced tailings Mill Ball the water In subsystems installation stations, operational the accomplishment belts well the and in area and pipeline and of supply area no No. testing commissioning water, testing the units completed the is testing, and small the pretreatment are all pipeline SAG hydro of all for X are X completed of water kilometers long implant have and ore in plant, reverse have No. X tested. we Mill of have we which the in stockpile now fiber dome we osmosis pre-ops the mine of the desalinization conveyor XXX terms XX-kilometer pump the all

until completion loader is delay the loader on temporary the as here commissioned. in alternate right, seen the ship advanced concentrate a and arrangements of measure well Given shipping jetty the are ship

to of XXXX. Jonathan noted we see up have the the the by was last Installations concentrator. conveyor guidance On in primary plant of that latter project, pretreatment updated where is first the will from the Line part in earlier, quarter. ramp Slide ore continue for we this shows of year, the shows copper through target XX, systems. commissioning and down the the launder works. as the area completion which X bills the the you you tears, process. with continue slide of No. Mill goes than of the shows hydro completed concentrator grinding X followed this are the focused desalinization grinding the kilometers we the As testing facility, transport of and XX to Slide completing capital our stockpile X tailings as be cost and overland On lines storage have Mill the pressures XX, the Line tanks X out tailing there ready on area on from foreground operational where part during and stockpile can see stacker been used. the SAG at are the lab. and themselves, with in previously, splicing XX, concentrator the X are mentioned piping we we flotation the mills the Slide of Slide the the the and for to are to all that concentrate subsystem XX Ball mill XX Slide XX the the Slide testing. electrical of undergoing X completed launder building now shows preoperational and No. ore where

Slide concentrate. on you the On can -- the XX, see

financial the building encourage focus the excited continue for color I with are we you be latest key highlights. section and success on now and making Investors we our commissioning video recent visit and I to the to progress view are additional photo it to the with of our watch gallery. Crystal construction operating the delivering to about very date and to most to on in progress pass will website So over a on pleased summary, milestones. project's

Crystal Prystai

increase cost quarter Thank at costs to XX, in which diesel in the to discussed of primary our last operations costs. increases QX such approximately relatively Red cost are our strip of costs year, for you, key Slide in key as and stable. related $X.X operating our inflationary the profitability billion and relates quarter. our by mine XX% productivity compared by pressures adjusted half third drivers including The Red. to our remained transportation not the The on ratio, We've outlined the EBITDA increased mining drivers

costs, adjusted In net QX that operating during fact, a on XXXX. control looking generated items our including the of compared the positive and we quarter, were to under production at EBITDA impact

and through We year on of diesel next as next key and cost year our expect our and the prices cost inflationary to on to unit pressure profit-based as well other balance pressures continue and into upward compensation put on input year. royalties capital costs guidance the into

costs repair and throughput. Antamina $X.XX by $X.XX unit copper now starting in maintenance increased particularly business Gross consumable XX% to by due a at partially primarily production Production driven Realized precipitation driven USD last Carmen decreased resulting significant to timing our higher year, compared X.XX to per decreased X,XXX in contractor costs in shipments. was production higher an historic realized This by by Andacollo. profit that higher primarily quarter a the pound. offset Slide copper remain reduction de per pound above year, to USD sales the X.XX and by copper unit prices pound event This XX% averages. of XX. cash on our and in July tonne mill from compared to third with but year, decline last operations diesel, was Turning from to last primarily X% XX,XXX due and Total costs prices reduced to decreased per by expenses. tonnes to from volumes

Looking X-year year pre-stripping reflects forward, high range pit, reduced trades. which Lornex the XXX,XXX copper rates XXXX absenteeism, skilled copper Valley our production in Highland We and guidance tonnes to remains XXX,XXX issues a the result as unchanged. production per particularly guidance maintenance-related delayed of our to of in

XXXX Our unit cost remains guidance copper unchanged. for cash net

XX. Dog unit and year increased in primarily from XX% higher higher zinc to million. the production increased by mill a sales Trail Dog zinc KSAT In furnace partially Red QX $XXX The roaster costs our operations. and XX% by The at was was volumes, Red increase production concentrate our and to business zinc underway Gross driven by due dome. offset by to replace operating the quarter, prices Slide and now work unit reflects operations, at refined on to last X% grades. heart increased higher at XX% zinc concentrate throughput zinc Moving increase profit major zinc which our zinc

November. We in to started maintenance which expect in be the work, completed September

unit steel consumable zinc This Total Finally, pound. our costs unit per reflective of $X.XX costs increase cash charges. increased as -- smelter $X.XX costs, transportation well in higher business sorry, processing diesel and is as to by higher

reduced As have planned through refined we and to the production XXX,XXX XXX,XXX production maintenance to guidance to our extended we zinc than forward, look lower plant due tonnes year.

of Red XXX,XXX zinc concentrate in expect Dog in tonnes XXX,XXX We QX. to sales

for unchanged. cash net unit XXXX remains Our cost zinc guidance

Turning now to XX. Slide

USD and and quarter and this the Notwithstanding of China this per increased in FOB per in unit USD unit of USD year. USD coal costs averaged due of decline to to steelmaking primarily coal per a strong of from volumes The compared last quarter compared for operating to steelmaking CFR XX% on by inflationary million price prices Our in steelmaking are sales effect with third XXX steelmaking last XXX year, to high business XXX pressures. was averaged XX% second $XXX year. lower realized to assessment driven tonne Australia based the a year. increase QX tonne. after production partially billion profit tonne was with gross increasing by the per of the higher a offset price, record increased quarter delivered coal XX% prices Sales $X.X which tonne by customers coal our China XXX by

tonnes, X% X% by by Westshore the outage the to driven decreased earlier. which production disclosed tonnes recently million within driven compared decrease to our Terminal. last by volumes was to The decreased was outlined year. the Elkview the resolved range. million Sales was coal X.X primarily steelmaking X.X of and quarter by plant plant by at guidance impact Third Elkview labor decrease outage The Red disruption

production would tonne Our to that significant to cash Compared to XX% per port a last finally, Neptune to our major increase investment tonne XX% cost otherwise all per year-over-year. higher in cost increased shutdown of rail inflationary our $XX costs. year, tonne per tonne transportation price the last sales the due WTI cost the Neptune lower categories, to from volumes. in coal capacity lower operated cost $XX XX% for site materially and reduced increase on costs accounted oil had design month fuel the adjusted across $XX of at by the per pressures in steelmaking demurrage offset September. QX operating increased impact Westshore And year surcharges have $XX and of partially input from sales by Terminal due

forward, outage look the impact quarter. we fourth to expected in production and sales is the As LC

tonnes to tonnes, sales million to to guidance our from costs. XX.X million of The XX also million impact to X.X plant XX.X million been million XXXX production has LC and Our million and X steelmaking tonnes. decreased expected expect transportation outage is to QX XX coal we site

plant guidance opportunistic is our expected the demurrage cost tonne, the volumes impact site to cost outage. guidance The completed $XX and adjusted expected maintenance year and to due of costs. We plant during late transportation $XX full pressure per to LQ November on expect production tonne is restart $XX in being per for on sales and $XX upward our increased of to cash to we

XX. Slide to now Turning

driven volumes unit costs unit by higher up X prices, of million rates. a operating Energy quarter, as $XX trained million production of sales a loss increase was in gross result delivered of increased $XX the and business significantly Our profit a WCS year lower from The ago.

Hills, gross million is an noted we Fort approximately and the noncash our after-tax of November to conditions in announced subject for cash X and is agreement approvals. $X approximately in billion The Jonathan sale customary interest expected $XXX QX. be recorded of effective As to proceeds in of closing charge and regulatory sale earlier, impairment

will in operation Our quarter reported the of updated as capital beginning be our discontinued fourth investments. a XXXX. XX Hills interest in Slide for outlines Fort guidance

As expenditures as than revised a capital to QBX for guidance, and be XXXX a by XXXX no increased $XXX Jonathan capital billion $X longer result increase And capital our earlier, while to the $XXX the cost of we noted lower our million. reduction XXXX, continued across expect of QBX million our we pressures given guidance we continue capital to business. in inflationary expect

Looking Slide XX. now at

continue USD to including financial facility. currently X and strong billion cash We maintain credit undrawn of of $X.X billion $X.X billion We position. sustainability-linked revolving liquidity, our an have

major We prior debt have all and of from a no net X debt XXXX. to rating adjusted X.Xx, maturities credit EBITDA to credit ratio agencies ratings investment-grade

shareholders significant our With by uphold of it demonstrated Jonathan returns weathering are We Teck macroeconomic this strength. successfully framework, to track our confident adhering I'll continues our of capital disciplined And to turn in ability back period in uncertainty, sheet for very quarter. QBX that, strong the returns allocation comments. complete to while closing record cash third to balance to our given as

Jonathan Price

Thank you, Crystal.

peers our acquisition not have. Our in continued something copper resulted many in of an simply is and growth outstanding do pipeline, resource investment has that which development

phase of step feasibility pipeline is QB expected receipt XXXX. production development in be in is year. announced be Slide copper growth The next XXXX. targeted to regulatory to closing mill with be portfolio completed subject approvals. the will have first which first reflect Turning copper updated of environmental our for XX. equivalent projects to is QBME transactions, expected our a transformational to expansion. all the more QBX our CrebradaBlanka million than growth X.X copper The recently near-term to the activities, add conditions, these Cumulatively, contributor to baseline growth. new per have including potential tonnes to significant is of The we including copper -- production study, of customary

detailed in San production continuing we updated study also progress the permitting the in At are Nicolas, and late stage copper we XXXX North are feasibility was the feasibility growth in feasibility underway. And final At in project, and Met study of projects. work We the completion to other are QX process. is our engineering Zafranal, in the completed mid-XXXX, targeting first XXXX. and of

Zafranal path demand envy in We to There are In that growth will closing, shareholder economy, realizing we to opportunities continue Teck high-quality value. as advancing to new metal peers. is long-term, positioned drive a the value a options of sustainable growth our on transition a copper copper XXXX. well carbon ahead lower drive and global of is meaningful the and have portfolio

continue we'll As portfolio forward, rebalance while move of we to copper our our business. overall proportion to reducing the carbon in

to in we responsible returns our our the framework, growth cash time, core will shareholders. leadership over is Thank Fraser. share Teck's you. and exciting in consistent with At development. with best drive balancing will practices the allocation follow resource and purpose same and to sustainability rigorous mining turn very stakeholders. continue benefits our up will the capital We future. in an now call to back vision, us setting of This of our the incredibly strategy for maintain I and

Fraser Phillips

Thanks, Jonathan.

With are Ariel, then, for to hand available, to follow-ups your We're just Just before amount answers. don't today, happen call to that get if to to and -- I'll to left, we over required. it we afterwards just . my go note Q&A, team happen we myself if the -- to I everyone conduct any on a have that, get time time of for but to you questions. question don't wanted and we fair

Operator

Instructions]. [Operator

Barnes Greg comes of The question from Securities. first TD

Greg Barnes

get dollar over Should so. experienced XXXX. better Canadian forward, we capital $X given for or Jonathan, obviously, in somewhere going high at higher a coming I be you've terms? into the past pressures the a inflationary on as year CapEx that as Sustaining number with sustaining just handle QBX want looking capital, or a billion to CapEx that's on between

Jonathan Price

Clearly, to to just billion. we've just for $X have that billion $X question. to over the to unit guidance costs. the that example, for to for our just would the QBX, see of some to driving a in factors factors just where we CapEx, fuel, broadly on previously capital sustaining above there's given let Greg, from XXXX XXXX. from on spent $X of been or profit-linked our Crystal goes inflation on we as our hand These same in hand course anything guide moment be provide now within circa Generally are if driving costs. to inflation to speaking, more said, to capital will step-down the normal inflation, she But billion labor-related the I'll add Thanks, that the you me above in in early updated costs for more that which, To are discussed of specifically. your in we question detail. sort expectations Crystal sort has be project

Crystal Prystai

Thank you, your question. Greg, for

we our budgeting working consistent normal our and process. February, towards mentioned, through are Jonathan our still we are As making practices, guidance in with way our

capital XXXX, expenditures. answer can't say where on but can I So will in portfolio question for sustaining your capital I specific be across our

our to where finalized than February. came but we'll We are wait be we lower we've guidance it in have in still expecting XXXX, for to until

Greg Barnes

I try. Okay. it a give I'd thought

on guidance Just the as million the to tonnes. reduction follow-on. XX again, Jonathan, X-year XX -- the business, a coal million in to

issues XX to -- that you think that back point? of ability have all you level outlined you've to M&A million XX some the to tonnes or in you given permanently So can get do get at to lost the million the

Jonathan Price

So mines and the XX of certainly, achieving to are XX. capable plants the

that produce a events, we've for reasonable factors, have to understanding therefore, us market business. years, perspective level. of as a this assist caused We've to below factor started And of external to However, to the recent from had expectations. in we how and mentioned series about them planning over many think that production in which outlook a

here achievable. is if XX thinking remains absent have. included factors we've way Sheremeta, events, what you million of we've of just per will Now He business. Robin do why a year to we the our color of had tonnes XX sort million and Coal guide the a to bit But on our then more the President just hand you the to production external give annum some future that any decided over little I'll in

Robin Sheremeta

we're -- we place strong and for to performance in and market. our and then strong November wildfire in the events production got able of we what advantage logistics good all say, kind we're walk capacity want in COVID-XX. of I rain higher At got absenteeism, we and saw rebound why the so headliner and And logistics of you the sense taken a absenteeism And We to also through, environmental years And in really today, steps continued X we through with to you the XXXX, and to that. took you a actually despite time, we've steps production had inventories start having was That of couple we of gives -- XXXX, saw of obviously, by go to flooding last a issues the logistics curtailments. in had inventory-related out operations store was the which prioritized, think with opportunity the got where plant it down. we that year. were that is different small not lot which our due we of COVID-XX drive due kind production lost. back the river events because maybe actually In Greg, the We some went high and the back wildfires to compared from I if through we at. 'XX, Just, and summer, caused mitigation impacts. events. same a again through XXXX that hit and a COVID in and became the took just of taken. out the recovering summer, a But atmosphere

So those we the year additional of X And due years out to the caused Coming were fraught with into the extreme with inventories maximum things well then production early 'XX, rain year, again in event. that starting challenges. had freezing up we ended control. our

start year. strong a So to we get the didn't

for less to remaining an do X still fortunately, the with have has environmental establish part, most labor. continue We're to still perspective, help that Now of pandemic, and offset levels been we years trying from rebuild trying but we're eventful that. to challenges the from year

of seeing to takes we're to attract last It time. And considerable I the people say train people, in will takes to months. that couple that So time operations. improvement over the

we've and confident had that capacity before. more So we able the getting rebuild more -- we're that to that I'm

LQ us, -- of most the we've guess, that So incident. got now, foundations tube got issue of We've pieces plant new get one-off going behind reconstruction, and the of team arriving. The with are is it's the a this through it. the plant, latest difficult I We'll get back. to really and in working the some hard

remains back the the in we good on So track, and all shape by end of should that be month.

that we pandemic you take we levels where quite more like hitting related, it into was are if important of conspire of against around if and recommend world things these range felt that. to uncertainty year a of upper that So some production. was environmental I happens of would the the us, reflective which account, conditions in a things have be confident historical doesn't think we all many that

plots It's you So I of of bit on the luck are a side, -- our matter a have capable. guess. just

Operator

Our question Orest comes Scotiabank. from of next Wowkodaw

Orest Wowkodaw

either the your Jonathan, there business? growing the i.e., solely be -- Or if coal your perhaps portfolio transformation that I'm and the do the see rebalancing business? is metals. strategy diluting low two of wondering coal some to around the priority that accelerating if you copper to divesting seems carbon for by number potential business,

Jonathan Price

been the a taking thanks of to question. that Orest, that. we've approaches number for There's

production announced something portfolio expansion metals growth copper Fort divestment, you that mentioned the new us is approach to which as highlight, weight the units the the projects The we as bring towards the through swing first, further being of way carbon. being we're copper being reduce carbon key the in next or of gotten very Hills. with green opportunity doubling into online I as Nicolas, to and Secondly, the range San have you've divestment with there copper for agreed around pleased And then portfolio, us Clearly, QV bring the seen more really, year. mill oil QBX the and is overnight away an sands, from

execution active team of our portfolio. mentioned the the the we're remain in factors is priorities, reviewing As and right composition are and the we've deliver. portfolio before, But what shape thoughtful and on of I've what focused that's that's key very and we to now, said always the those gearing up

Orest Wowkodaw

seen magnitude question USD as in of I there surprised here. be us in seeing increase. you been Can We've X.X what a more the for color total, on what's of at give Red, the the a last billion. that And just CapEx about just I've in quarters because probably can't follow-up, for QBX terms on significant you're escalation inflation. X Okay. driving simply right?

Harry Conger

not attributing date forestry There's on of dealing it quarter-to-quarter. to They're to with to inflection be No, line we've to with. a you we're great been those No. again. the of variety you all things keeping up on entirely that

that to that First, I are are incur of we've made. everything involved to -- we then track what with occur what we outcome. do we address that quarter, just everybody can but them, and can we and system what's just the bring where change plans initial don't robust very happening emphasize, that And it costs got to true trends, forward up. we contractors variances the We turn want do to from us, issues where a every going, capital all bring in we the

piece it's financially I end this mentioned in that we for concerned year, using tailing year, a launder impact. the for presentation, to in to earlier which the allow that it The of that year, to us. huge were we if started incurred overall, construction construction of a late was that example an not going advantageous get last kilometers cost the the that of us Here's XX be the be very of to cost was of yet method be going happens, would the that contractor completed time here at very

So them, to And with up redid that's now ready of acknowledge to of that the a with go. terms have tailing launder in came contract we financial reviewed all we construction, different complete, a construction of their the approach. method order different

significantly. good adjustments that making here So the an We're quarter there. past outcome like in

electrical whatever. the the peer. Jetty, weeks. the accelerate showing charter we've inefficiencies flying running And of XX% allowed absentee like -- would Another on It's you've that remote plant, be of got at remind in now supervisors, that. X the room to do to put people don't desalinization everybody We're a and crane on day And et all and associated want cetera. employees you and for we're in out with XX,XXX just of this, out of the throughout planes X I then us example every key have all on commissioning land rates this up operators, location to count

with your on skills have you You and reconstitute the to and craft what the crews can fly do that have. the you

critical now on let just there exciting path. the with end dealing It's of and this week. was was adjusting last together. been this we've week, So thing to want see I site entire those crispers me things. all come I really they're I And with

it. adverse all virus You healthy employees on time saw protocols, now, in in optional. last the the of They first are were of years, doing stays to wear where the pictures with today. We've extremely masks circumstances It's associated under site have coming mask et it couple cetera. don't We together. everybody October, done for a our

all and years. will here So first end it's time it faces strong the encouraging, I've the And and be seen going up to year. very up people's thing X we're this there by in finish running of and

Orest Wowkodaw

Just in it? the Do what's your finally, Red, to is you think this level X.X confidence number, updated X.XX. this

Harry Conger

to absentee we've the is of incurring today that we this we now assumed inefficiencies today, calculated that. in. high knowing what we're with are have that know qualifier right continue rate we trends that all know everything all the that associated included And and are in Well,

current happening ground in of what's everything is -- on today. there the know the those we [indiscernible] So trended for and

confident estimate. we're that and good So it's number a a good

Operator

Winder from Securities. Bank question Lawson America comes next of Our of

Lawson Winder

like I'd the may, options for I QBX. concentrate to about shipping alternate If ask

were fully in maybe facility for example, arrangement discussed extent to would costs volume? So processing if look up, could handle ramped shipping possible of in they that of are, what like that If you what those the sufficient alternate they look concentrate like the terms what terms to be capacity? arrangements and

Jonathan Price

that I'll Logistics. Foley, question. SVP Lawson, thanks of Marketing the to and our for pass Real

Real Foley

arrangements we have trucks All place actually alternate will are bio with there for and hard working right. arrangements we're retainers working they're enable actually shipping the those live alternate with shipping in order alternative place in trucking companies that. question. Thanks, to Lawson, Yes, There for also to ports. in on and containers ports,

also concentrators. arrangements year. the have copper the be the concentrate transportation capacity within worked We're we to that those that And during on get to the at Chile Chile. QB that ship in being reduced to also concentrate confident are are smelters by sales looking we're the to So will domestic

Jonathan Price

Yes. Réal. Thanks,

chain The Lawson, I'd is just of and very due some to to weather other and common are that, add handle to Chile, events. of supply thing these disruptions arrangements interruptions they're in used ports

of some in this now for us medium the anyway establishing So be advantageous likely term. will

Lawson Winder

versus Makes a the as to [indiscernible] lot indication of any of just sense. And then alternative cost this the

Real Foley

We'll we give that. into if provide I days this year is think Lawson, next go Yes, it's that as early we do guidance on. for something guidance

Lawson Winder

completing on now. wanted sands follow oil that then Fair. Congratulations up the sale. And I on to Okay. also

to effectively business the but substantial oil you and that? been of operating operating an oil Frontier, maybe oil there there potential -- has of project in potential you're interest now in Has the thought of the still sands any purchasing sharing a sale buyers sands asset, any out or from have sands So been portfolio.

Jonathan Price

of Yes. comments just Fort couple on a Lawson, of I'll first make divestment the Hills.

competitive that in will if the achieved asset. operator. guidance that billion they will $X at long-range they give assumptions did Suncor by that medium-term of more detailed We bidding We have here, on now on a release, multiple parties were talk the interest press understood, underpin the Suncor's actively the valuation have And of the asset and cash from as on look process some challenges provided our you associated -- end reflects that some the we've that to plan of The with the November. run for time. at they're nonoperated

multiple basis, we've relative actually final will in at for this helpful a is assets. a forward-looking of for I precedent thing better value to transactions that about on that I would the understanding potential assets be asset The to oil say of So recent perhaps similar transacted is think now getting competitive that relative sands expectations. the prior

portfolio. good here, us improves with our an green very think and investability achieved overhang towards we're from for with we for and satisfied a away sands oil our of valuation because metals the we it been consistent know our in we it's shareholders, carbon it's deal think the So has strategy moving

specific your us to they that execute to options are question Now for options. not They We and on and Frontier valuable believe Lease develop. XXX. are do

Oil those As over specifically. you to options And highlight, energy we in we time. evaluate nor won't sector be operators therefore, Sands in will and transact on the

Fort deal Hills asset with though that being hence, to upfront. us chose and we for an was in operation the priority

Operator

Markets. comes question Jackie Capital BMO from next of Prelovszky Our

Jackie Przybylowski

question those some to that Fort to be parts My thoughts combination up call, first broadly, as will question, other $X follow really about there large alluded at in fairly for business? potential this sort you'll about on but sale? love be things? Or to billion require the or planning asset of the what is the do onetime that even the is return QBX of do And -- a bringing from the thought that you going Jonathan, just be a hear just of that beginning you're some And capital would to I to Hills. for this I on with of shareholders? Or to I of you know think,

Jonathan Price

upon Great how transaction, put capital about will previously. Jackie. talked this receive when the The them That's framework. be the the of completion we've towards we question, allocation Yes. proceeds

warranted the As with through on returned available retain of other XX% you course, uses flow allocation automatically then and first we consultation cash point believe know, based that the that's is at of amounts additional return the cash discretion in Board, shareholders, of framework, on we to if time. based capital to our

a of be due that. framework, the but allocation XX%, will message a operation capital there upside minimum of result return this as shareholders to to the on Key So potential for

Jackie Przybylowski

dividend? a do of special like would be Or buyback? be that? just a to that have Or about be format be the of And clear, you thoughts it would that -- could sort

Jonathan Price

view It in the Jackie. make at at time any our on based a We could go with but preferences particular based it on price, shareholders be that either discussions point either, share determination could on time, for example, and the way.

Jackie Przybylowski

to help be maybe is and result we on question, beginning XXXX Understood. change -- in your XXXX And tax your starting assets maybe in last be of as XXXX. Can starting you in see us charged to income of income Canadian give tax payments noticed How maybe statement about a that? of a expect has with little going couple just the help. the of MD&A another talked I in XXXX cash modeling should quarters, to bit

Jonathan Price

that Good Crystal. to Thanks. hand I'll directly Yes. question. over

Crystal Prystai

Jackie. question. a good Thanks, That's

You're correct.

are We earnings. taxable cash on XXXX our

However, would the cash our and deferred tax the -- XXXX and tax be payments copper relating into rules have allows That installment are held. income most into with earnings timing operations our XXXX. with us inclusion rules there associated of partnerships. we actually and which to coal are defer some for the That's where of majority the to Canadian XXXX

allocate. earnings terms you So the proportion cash the the into year it timing. I amount full can would payment of for to But of XXXX in our think of 'XX, assume will of determination the take goes on depend can and -- we taxes majority we those offline the

Jackie Przybylowski

maybe And QBX, question. us I'm one I be indication great. will up you online follow you've given sneak you've for with in guessing that for changed -- might can budget could any the last how quick on the QBX And the now That's is it contingency is can remaining revised Okay. give a this that if one. I you us you just hopefully, budget there bookends? -- much offline.

Jonathan Price

you pick to do want that . one Red, up? or Crystal

Harry Conger

made way Yes, foreign included variances going known Jackie, forward rate, an in and also are that the We've that we've all all cetera. it I exchange a is things faced estimate would characterize estimate. et on

are So that this point. things at that contingencies I we covered think all I know, you would tell all

Operator

Raymond James. comes from question Brian of MacArthur next Our

Brian MacArthur

follow-ups. two Just

the Red changes working there capital everything call this we timing when is you in, Or as for that now? through as numbers, does the well? that say build for another First, QB is go all on given include XXXX, Jonathan, cash or

Jonathan Price

have Red, got you that?

Harry Conger

capital there's into no Yes, on budgeting the was capital, mining there. when that. capital -- working we're there that are That's working Brian, for going on for. about construction where that all and start-up the any goes side talk accounted of the built operations we be to operations

Brian MacArthur

it. thought you how I were doing That's

that question, sale. there you What gross tax about Second capital talked that available on is, to potential I'm return? the out tax proceeds Fort proceeds a obviously, there. for get trying Hills and back to at the significant discussion was Is on

Jonathan Price

Crystal?

Crystal Prystai

isn't Brian. answer material to it small the impact. $X short, is we capital to in the there tax expect relation that is no Thanks, loss on In Great There but is transaction, the that in question. material billion. nature a

Jonathan Price

gain, yes, Crystal I'm highlighted. So no going say, capital as to Brian,

Brian MacArthur

forward? show Has slide divestiture is in Is was great to to as develop now copper was the anything partner, before But Zafranal you my maybe to your options. changed long-term discussed the Fort have Hills your are that financing. still -- just all way change given the Perfect. it Is question or Jonathan, there third there -- and And you're I any Zafarnal you a of in anything? this now. changing the going have going which relates maybe think the opposed just there strategy with of maybe sort view

Jonathan Price

course. we of optimization at a Brian, looking the options still that. We're of have of number there,

that, XX%. basis. the to and derisked. at so look continued XX% looking are options all behind the have the XXX% could fully on ensure -- the us to table You of moment, study development completely for we one. we ahead the were on we at be will could with know And permitted feasibility still on given the Mitsubishi in partner is We we in past, for divest move have that the another balance of there just a it us, that. introduction that We've with It's

with. in else time lot a be the in same frame that have to grappling pipeline We

the right of So is say in risk make what to options period. these sequence their return that And is development determination long are we I need here we of assets the part and profile. certainly would based on for

the of options and the all table. all all part in optimization So on still next the

Brian MacArthur

Great.

Operator

Mr. call question-and-answer closing now the the over Price for remarks. I to concludes session. This will hand back

Jonathan Price

closing I probably it hand remarks. for Phillips think we'll Mr. to

Fraser Phillips

Absolutely. Yes.

So thanks, us. everybody, for joining

to are or addressed, follow over we'll us questions everybody set your not, and so speaking I from chat do get Thanks e-mail. know again up now. and didn't for you If we a quarter there something and us can look again please let joining did know to some that forward up and it

Operator

concludes This today's conference call.

disconnect Thank your may lines. for day. You you a pleasant have and participating,

Teck Resources Limited (TECK) 27 Oct 222022 Q3 Earnings call transcript