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Trail fail impacts Teck zinc output

Teck Resources (TSX: TECK.B) has reported an electrical equipment failure at its Trail operations zinc refinery in British Columbia, which is expected to result in a production loss of up to 30,000 tonnes.
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An equipment failure at Teck’s Trail operations zinc refinery in Trail, BC, will impact output

Staff reporter

Teck said the failure affected one of four rectifiers used in the refinery and repairs were expected to take up to 20 weeks, at a cost of C5-$10 million.

"As a result, production capacity during this time will be reduced by approximately 25%, resulting in an estimated production loss of 20,000-30,000 tonnes," Teck said.

Trail had produced 74,400t of refined zinc in the June quarter, a similar level to the same period a year earlier.

Profit at Trail was negatively affected during the June quarter by historically low treatment and refining charges and higher electricity costs.

The higher power costs were due to Teck selling its two-thirds interest in the Waneta hydroelectric dam in July 2018.

The company had said last month treatment and refining charges had recently increased and were expected to positively affect profits at the Trail operations in the second half of 2019.

Teck said there were no injuries or environmental impacts related to the failure.

The company yesterday also announced a C5c dividend, after saying last month it had updated its capital allocation framework to reflect its intention to make additional returns to shareholders, by supplementing its base dividend with at least an additional 30% of available cash flow through supplemental dividends and/or share repurchases.

Teck shares have fallen from a 52-week high of $34.31 in April to $21.50 on Friday.

They closed down 1c yesterday to $22.03 to capitalise it about $12.2 billion (US$9 billion).