Teck Resources Ltd.'s Greenhills Mine near Elkford, B.C.
Teck Resources Ltd. is working to minimize the impact a British Columbia coal mine explosion will have on annual production in a tight market for the steel-making product.
Vancouver-based Teck continues to investigate the cause of the "serious" incident at its Greenhills mine near Elkford in the southeastern part of the province, and isn't yet sure how long the mine will be shut as a result.
Analysts have estimated a closure of between three to six months, after Teck said damage to the dryer building at the mine site is "extensive."
Teck shares fell almost 6 per cent Tuesday on the explosion report, as well as a drop in commodities on fears of slowing economy in China and continued worries about economies in Europe and North America.
Greenhills had planned production of 4.3 million tonnes of coal this year, which represents just under 2 per cent of the world coal market, estimated at between 220 to 240 million tonnes.
The company owns an 80-per-cent stake in the mine, putting its share at approximately 3.4 million tonnes, or about 15 per cent its estimated total production expected this year of between 23.5 to 25 million tonnes.
South Korea-based Pohang Iron and Steel Co., also known as POSCO, the world's second largest steel maker, owns the rest of the mine through its Canadian subsidiary.
Teck had been forecasting a 25-per-cent jump in coal production from about 20 million tonnes last year, largely a result of a pickup in demand in China.
To lessen the impact of the explosion on production plans, Teck is planning to ship coal from Greenhills to its four other mines in the region.
"We would expect to be able to mitigate some of that impact using the preparation facilities at other mines," said company spokesman Greg Waller.
The production shut down will further constrict the global coal supply, which has been shrinking as a result of higher demand and closures as a result of recent deadly mine accidents that have killed hundreds worldwide. That includes the April explosion at the Massey Energy Co. mine in West Virginia, considered the worst U.S. coal industry disaster in 40 years, which killed 29 workers.
Some U.S. mines have also been shut down since as a result of safety crackdowns.
Four employees at Greenhills were treated for minor smoke inhalation from the explosion, which also triggered a brush fire in the area. The fire was still burning but was "contained" as of Tuesday afternoon, according to fire officials in the area.