Teck Warned of Cost Pressure from Fuel Shortages in Chilean Operations

Teck Resources warned that rising diesel and freight costs could increase spending at its Chilean copper mining operations during Q2, as global supply tightened.

The Canadian mining company said its Chilean operations relied on imported diesel and faced higher fuel and transportation costs due to supply disruptions related to the Strait of Hormuz, although no severe shortages were expected. "We expect freight costs to continue rising in Q2 2026, with explosives costs also increasing accordingly. We will continue to closely monitor developments, such as potential product export bans by major supplying countries, which could further disrupt the market," the company said.

The warning highlighted broader supply chain pressures and the risk that government intervention could tighten metals markets, potentially prompting enterprises and strategic stockpiling of copper and zinc as demand strengthened.

Alongside the cost warning, the company reported strong Q1 results that exceeded analyst expectations. This was primarily driven by higher copper prices, record sales, and increased production at its flagship mine, Quebrada Blanca (QB), in northern Chile. Production at the newly expanded mine grew 31.2% to 55,500 mt, compared with just 42,300 mt a year earlier when output was constrained by prolonged shutdowns. Despite a maintenance shutdown at the start of the year, performance remained on par with the previous quarter.

Total copper production in Q1 reached 140,000 mt, compared with 106,100 mt in the same period last year. The company still plans to produce 455,000 to 530,000 mt in 2026 and 505,000 to 580,000 mt in 2027, while 2025 production is expected to be 453,500 mt, with the QB project expected to contribute 200,000 to 235,000 mt next year.

Driven by growing power demand from data centers, artificial intelligence, and national defense, as well as expanding investment in power grid and electronic infrastructure, global copper demand is expected to surge 50% by 2040, benefiting Teck and its peers.

Concentrates zinc production fell to 120,300 mt, a decrease of 17,000 mt from the same period last year.

(Wenhua Consolidated)