The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Strong zinc production and price equates to robust revenues North of 60 Mining News – July 29, 2022
The Red Dog Mine in Northwest Alaska produced 607 million pounds of zinc during the first half of 2022.
Teck Resources Ltd. July 26 reported another quarter of strong zinc production and revenues from its Red Dog Mine in Northwest Alaska.
During the second quarter of this year, Red Dog produced 143,800 (317 million pounds) of zinc, 9% higher than the 131,600 metric tons (290.1 million lb) produced during the first quarter of this year and a slight increase over the 140,300 metric tons (309.3 million lb) produced during the same period of 2021.
Second quarter lead production at Red Dog was 21,000 metric tons (46.3 million lb), down slightly from the 21,500 metric tons (47.4 million lb) produced during the first quarter and a 25% drop from the 28,500 metric tons (62.8 million lb) produced during the same period last year.
Teck attributes the differences in metals output compared to the second quarter of 2021 to expected shifts in ore grades at Red Dog. The ore fed into the mill at Red Dog during the second quarter of this year averaged 16.8% zinc and 3% lead, compared to 14.1% zinc and 4.3% lead during Q2 2021.
The strong zinc output at Red Dog comes during a quarter that the price for a pound of this galvanizing metal averaged US$1.78, a 4% increase over the US$1.70/lb average for the first quarter of this year and a 35% jump over the US$1.32/lb during Q2 2021.
The zinc price, however, began dropping late in the second quarter and is currently sitting around US$1.40/lb. This pullback in the price of this metal vital to a large swath of the global economy is due to concerns over inflation, high energy prices, and a possible recession, which has caused buyers to slow purchases and focus on adjusting inventories until clarity returns to the market.
Available inventories on the London Metals Exchange have dropped to 61,000 metric tons, which is historically low, and Teck said inventories in China dropped roughly 40,000 metric tons during the quarter.
As a result of strong zinc production and prices, Red Dog generated C$223 million (US$173 million) in revenues for Teck during the second quarter. This is more than double the C$99 million (US$77 million) of revenue generated during Q2 2021.
Likewise, Teck's profit from the Red Dog Mine was C$164 million (US$127 million) during the first quarter of this year, which is more than double the C$77 million (US$60 million) during Q2 2021.
Adding in the banner first quarter, Red Dog has generated C$747 million in revenue and C$400 million in profit for Teck during the first half of 2021.
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
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