June 29, 2010 / 6:23 AM / in 7 years

Teck reports explosion at coal mine

TORONTO (Reuters) - Teck Resources said on Tuesday an explosion occurred in the coal dryer at its Greenhills coal mine in British Columbia and the company has mobilized teams to control a brush fire sparked by the blast.

Vancouver-based Teck said all its employees and contractors were safe, although four employees were treated for “minor smoke inhalation.”

Teck operates six metallurgical coal mines in British Columbia and Alberta and is the world’s second-largest exporter of seaborne coking coal -- a key raw material used in the manufacture of steel.

The Greenhills mine located in southeastern British Columbia is 80-percent owned by Teck, with a unit of South Korea’s Posco owning the minority interest.

Canada’s largest base-metals miner said it will take several days before the damage can be fully assessed and the extent of the interruption of production at Greenhills can be estimated. The cause of the accident was not immediately known.

The mine was expected to produce about 4.3 million tonnes of metallurgical coal in 2010.

BMO Capital Markets analyst David Radclyffe said the accident may force Teck to lower its 2010 metallurgical coal production forecast of between 23.5 million and 25 million tonnes.

Radclyffe estimates that on a quarterly basis, Greenhills currently accounts for about C$60 million of Teck’s profit, or about 10 Canadian cents a share.

“The company may be able to ship some Greenhills material either without drying or by shifting production to other prep facilities,” said Radclyffe, in a note to clients.

Shares of Teck were down 3.6 percent at $31.36 in premarket trade in the United States.

($1= $1.05 Canadian)

Reporting by Euan Rocha In Toronto and Anne Pallivathuckal in Bangalore, editing by Dave Zimmerman

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