(Reuters) - Teck Resources Ltd is interested in expanding its sales of steelmaking coal to India, company officials said on Thursday, as the Canadian miner reported quarterly earnings that beat market expectations, lifting its shares.
Coal sales to India, the world’s largest growth market for seaborne high-grade steelmaking or coking coal, represent about 10 percent of Teck’s book, Teck’s vice president of coal marketing said.
“It is a market that we have a lot of interest in,” Réal Foley said on a conference call to discuss second-quarter earnings from Teck, which is the world’s second biggest shipper of seaborne coking coal.
“We’ve invested time and efforts to continue developing (relationships), both with privately owned steel mills and government steel mills,” he said.
Reuters reported earlier this month that India was in talks with Teck for long-term purchase agreements of coking coal after a cyclone knocked out rail lines in Australia, cutting supplies earlier this year.
India needs about 56 million to 57 million tonnes of coking coal every year, of which about 85 percent is imported. According to the government’s newly-drafted National Steel Policy, India’s coking coal requirements will more than double by the fiscal year ending in 2031.
Earlier on Thursday, Vancouver-based Teck reported a big jump in adjusted profit of C$577 million ($460.61 million), or C$1 per share, in the three months ended June 30 on the back of higher coal prices and a weaker Canadian dollar.
That compared with C$15 million, or 3 Canadian cents per share, a year earlier, and was ahead of the 90 Canadian cents a share that analysts, on average, were expecting.
Teck shares rose 1.7 percent to C$26.60.
Teck, which also produces zinc, copper and gold and had been grappling with high debt levels, said it had achieved its target of reducing its debt to below US$5 billion.
Chief Executive Don Lindsay said the company did not see any acquisitions of good value in the market and would focus on internal projects, notably QB2, which is an expansion of Teck’s Quebrada Blanca copper mine in Chile.
Teck said its steelmaking coal business unit produced 6.8 million tonnes in the second quarter, compared with 6.7 million tonnes a year ago. It expects coal sales to reach at least 7.0 million tonnes in the third quarter.
The company also produced 70,000 tonnes of copper and 158,000 tonnes of zinc concentrate in the second quarter.
(This version of the story has been refiled to add dropped first name in paragraph)
Additional reporting by Ishita Chigilli Palli and Mekhla Raina in Bangalore; editing by Subhranshu Sahu, Bernard Orr
Our Standards: The Thomson Reuters Trust Principles.