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(Bloomberg) — Canada’s Teck Resources Ltd. warned of higher fuel costs for its flagship Chilean copper mines as the global mining industry grapples with supply-chain disruptions triggered by war in the Middle East.
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While there’s not a major threat to supply of fuels, “there could be an amplified impact on costs at our Chilean operations due to the requirement for diesel imports,” the Vancouver-based miner said as it reported a 125% jump in first-quarter core earnings.
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Turmoil in the Strait of Hormuz — which has hampered the global flow of oil and key commodities — has heightened concerns over market dislocations and cost inflation eroding mining companies’ margins. The industry relies on high volumes of diesel to power operations, while sulfur is used in processing nearly a fifth of the world’s copper.
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“We anticipate higher freight costs through Q2 2026, plus a flow-through increase in explosives costs, and we continue to actively monitor the situation for changes that could further disrupt markets, such as product export bans from key supply countries,” Teck’s earnings statement said.
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The firm’s adjusted earnings before interest, taxes, depreciation and amortization rose to C$2.09 billion ($1.5 billion) in the first quarter — from C$927 million a year earlier — helped by high commodity prices, record sales of copper and stronger revenues from by-products.
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The company held production guidance for its major Quebrada Blanca mine in Chile at 200,000 to 235,000 tons for this year. Higher output at that operation is a major focus for investors and the company’s management.
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Teck last year stepped up efforts to stabilize operations at the mine, known as QB, where tailings facility issues have hampered output and driven significant cost overruns. The asset is pivotal to Anglo American Plc and Teck’s planned tie-up, with QB set to be integrated with Anglo’s nearby Collahuasi operation to form a larger asset complex capable of producing an additional 175,000 tons each year from 2030 to 2049.
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The merger — announced last September — is contingent on receiving approval from all relevant regulatory authorities, the company said.
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