Teck Resources Ltd. TCK.B-T and Canadian Pacific Railway Ltd. CP-T unveiled a new 10-year agreement Wednesday for moving coal from five Teck mines to the Pacific Coast for export.
Financial terms of the deal, which will begin in April, 2011, were not announced, but CP said it agreed to enhance capacity on its system to handle increased volume from the mines in southeastern British Columbia.
Teck plans to increase coal production at the mines by 50 per cent over the next few years, and was looking for an agreement that ensured the higher production could be moved to ports near Vancouver.
“This agreement gives Teck the certainty we need to realize our growth strategy in coal and to deliver our increased production on a timely basis to our key markets,” Teck chief executive officer Don Lindsay said in a statement.
The mining company won approval from Canadian regulators in 2009 to shift some of its coal traffic from Canadian Pacific to its larger rival Canadian National Railway Co., CNR-T and it will continue to do that.
“We will continue to keep that competitive option open,” Teck spokeswoman Marcia Smith said.
The coal, used for steel making, is transferred to ships at Vancouver’s Westshore Terminals and Neptune Terminals, and Teck plans to continue using both facilities under the deal, it said.
