Red Dog zinc production rises with grades

Teck Resources Ltd. July 26 reported that the Red Dog Mine in Northwest Alaska produced 153,600 metric tons (338.6 million pounds) of zinc during the second quarter. This is 26 percent more zinc than was produced during the first quarter and a 20 percent increase over the same period last year.

Teck Resources President and CEO Don Lindsay attributes the higher zinc output "to higher-grade ore and improved recoveries."

The 25,700 metric tons (56.7 million lb) of lead produced at Red Dog during the second quarter is 5,900 metric tons (13 million lb), or about 19 percent, less than a year ago due to lower grades and recoveries.

Strong production at Red Dog, coupled with strong zinc prices helped to push the gross profits of Teck's zinc business unit to C$194 million, roughly 27 percent higher than the C$153 million for the same period of 2017. The second quarter gross profits, however, were down about 23 percent from the C$251 million during the first quarter.

London Metal Exchange zinc prices averaged US$1.41/lb during the second quarter of 2018, 9 percent less than the previous quarter but 20 percent higher than the same quarter last year.

Zinc prices hit US$1.64/lb in February, the highest price in a decade.

Teck said zinc prices have come under the same pressures as other commodities following the announcement of trade tariffs by the U.S. government against Chinese exports. Zinc is currently selling for about US$1.20/lb.

Considering the strong second quarter, Teck now anticipates Red Dog will produce 535,000 to 550,000 metric tons (1.18 billion to 1.21 billion lb) of zinc during 2018, a slight increase to its previous guidance of 525,000 to 545,000 metric tons (roughly 1.16 billion to 1.2 billion lb) for the year.

Red Dog produced 541,900 metric tons (1.19 billion lb) of zinc during 2017.

–SHANE LASLEY