Teck Warns of Higher Costs Due to Iran Conflict But Holds to Production Guidance

By Robb M. Stewart

Teck Resources could see a jump in costs at its Chilean operations with the spike in energy costs driven by the conflict in the Middle East, though the miner is sticking to its production target for the year after a steady quarter at its flagship Quebrada Blanca copper operation.

The Canadian company currently doesn't see a significant risk of fuel supply disruption at its mines, but said there could be an amplified impact on costs in Chile where its operations import diesel.

Teck forecast high freight costs through the middle of the year, plus a flow-through increase in the cost of explosives. It said it continues to monitor for changes that could further disrupt markets, such as product export bans from key supply countries.

The Iran war has tightened oil supplies globally, driving fuel costs up sharply and heightening price volatility. A prolonged oil-supply disruption would materially tighten supply chains, something financial markets are starting to price in with weaker growth expectations alongside likely higher inflation, Teck said.

While the threat of rising inflation and slumping economies is likely to weaken demand for copper for the coming year, Teck said the effective closure of the Strait of Hormuz due to the war is likely to support a global drive for energy-system resilience, energy security and electrification that supports the current trend in copper demand. A strong increase in aluminum prices also reduced the risk it could be used as a substitute for copper in applications involving electrical or heat transfer, the company said.

The Vancouver, British Columbia-based company said supply-chain stress and the possibility of government interventions could also drive a rebound in demand for copper and zinc through a mix of corporate and strategic stockpiling.

Teck, which is working to close a planned tie-up with Anglo American that will build one of the world's largest copper producers, logged a strong rise in earnings in the first three months of 2026, thanks to record copper sales volumes and higher commodity prices.

Copper production increased to 140,000 metric tons in the first quarter compared with 106,100 tons in the same period last year. Output at the newly expanded Quebrada Blanca copper mine in northern Chile reached 55,500 tons, consistent with the prior quarter, despite a maintenance shutdown early in the year, and up from 42,300 tons a year earlier, when the operation had an extended shut-down.

Teck's zinc in concentrate production was 120,300 tons in the first quarter, a drop of 17,000 tons from last year.

The miner continues to target copper production of between 455,000 and 530,000 tons this year, and 505,000 to 580,000 tons in 2027, against 453,500 in 2025. That includes an anticipated 200,000 to 235,000 tons at Quebrada Blanca in 2026, up from 190,000 last year.

Teck's first-quarter profit attributable to shareholders jumped to 819 million Canadian dollars (US$599 million), or C$1.67 a share, in the latest quarter from C$370 million, or C$0.73, a year earlier.

Adjusted earnings before interest, taxes, depreciation and amortization increased to C$2.09 billion from C$927 million last year.

Revenue for the quarter was up 72% at C$3.94 billion.

London Metal Exchange copper prices increased by 38% from a year ago in the first quarter, while LME zinc prices increased 14%.

Chief Executive Jonathan Price said the company remains focused on a disciplined operating performance and advancing the merger with Anglo American.

The creation of Anglo Teck has been approved by shareholders of both companies and in December got the go-ahead from the Canadian government. However, the deal remains subject to other regulatory approvals.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

April 23, 2026 08:11 ET (12:11 GMT)