Vancouver — Healthy markets for base metals and coal enabled
Profits for the 3-month period amounted to $116 million (or 60 per share), compared with $9 million (4 cents per share) in the corresponding quarter of 2003.
The Highland Valley Copper mine, near Kamloops, B.C., benefited from higher copper prices and emerged as the single biggest contributor (operating profit: $79 million) to Teck Cominco’s bottom line. Also, the realized price for molybdenum during the quarter was US$15 per lb., compared with US$5 a year earlier.
At the Elk Valley Coal Partnership, also in British Columbia, Teck Cominco increased its interest to 38% from 35% Buoyant coal prices coupled with increased production and sales translated into an operating profit of $39 million.
The Trail smelter, in the same province, added $47 million to profits. Higher prices for zinc, lead and specialty byproducts accounted for the increase, along with increased power revenues from electricity sales.
Cash flow from operations for the second quarter amounted to $246 million, up more than 400% from the year-earlier period.
The diversified major outlined a huge, $50-million increase in capital expenditures, most of which is earmarked for development of the Pogo gold project in Alaska and the Pend Oreille zinc mine in Washington state.
Construction at Pogo resumed in early May following the resolution of an environmental group’s appeal of a permit, issued by the Environmental Protection Agency (EPA), for a pollutant discharge elimination system.
In a related development, Teck Cominco expressed disappointment at the legal suit launched against it by the Colville Confederated Tribes of northeastern Washington state. The EPA and the native group are seeking to use litigation in an attempt to force Teck Cominco to comply with U.S. environmental laws. They state that decades of operation at the Trail lead-zinc smelter have contaminated the Columbia River for hundreds of miles downstream into the U.S.
The company vehemently defends the operation of the smelting complex, where it has spent more than $1 billion on environmental upgrades. The company says the quality of water in the Columbia River surpasses standards set out both in Canada and the U.S.
The issues have been contentious in that U.S. domestic environmental policy is being enforced across an international border. The Canadian government has voiced its concerns to its U.S. counterpart over the attempt of extending its authority into Canada.
Teck Cominco intends to work with all regulatory bodies in both countries to resolve the issue.
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