Under terms of the agreement, which runs from April 2021 to December 2026, CN will invest more than C$125 million (US$95 million) to enhance rail infrastructure at Neptune Terminals. The deal is expected to support higher shipping volumes between Teck's Kamloops operations and the expanded Neptune Terminals.
Teck CEO Don Lindsay said the agreement and associated infrastructure investment would provide the company with the rail capacity to match the major upgrades currently underway at Neptune, located in North Vancouver on the busy Burrard Inlet, home of North America's largest port by exports.
"We expect this will lower our total transportation costs and improve overall rail and terminal performance," Lindsay said.
Teck has warned the capital expenditure for the Neptune expansion has increased to $750-$800 million, up from only $400 million forecasted previously. However, it said the project remained on track for completion in the first quarter of 2021.
The terminal can currently handle about 24 million tonnes of bulk products per annum, with an expansion lifting the figure to 30Mt/y.
Teck's most traded shares (TSX:TECK.B) more than 5% on Wednesday to C$20.89, which capitalises the company at $11.6 billion.