UPDATE 2-Teck Resources says China coal demand weakens; cuts dividend

Tue Apr 21, 2015 1:47pm EDT
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(Recasts with comments from company conference call, stock move)

By Nicole Mordant

April 21 (Reuters) - Chinese demand for steel-making coal has weakened with imports for the first two months of 2015 well below last year's levels, the chief executive of Canadian miner Teck Resources Ltd said on Tuesday as the company announced lower earnings and a big dividend cut.

Whether the Chinese weakness will continue is unclear, CEO Don Lindsay said, adding that indications from customers are that the drop is "unusual" and that demand could rebound.

"We'll have to see how the year unfolds, but certainly it has been weak so far," Lindsay said on a conference call after Teck reported weaker-than-expected first-quarter earnings and cut its dividend by 67 percent.

Vancouver-based Teck is the world's second-biggest exporter of seaborne steel-making coal. The company also produces copper and zinc.

Teck said coal demand outside of China remained strong.

Teck shares were down 5 percent at C$16.05 after it slashed its half-yearly dividend to 15 Canadian cents a share from 45 Canadian cents.

It is the first time Teck has cut its dividend since it halted payouts in late 2008, when it was trying to reduce a mountain of debt following its purchase of Fording Canadian Coal Trust.   Continued...