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A truck hauls a load at Teck Resources’ Coal Mountain operation near Sparwood, B.C.The Canadian Press

Teck Resources Ltd., fresh off a record year of coal output, is forecasting another strong showing in production this year despite slumping prices for the commodity.

Vancouver-based Teck produced 26.7 million tonnes of steel-making coking (or metallurgical) coal last year, up 4.3 per cent from 25.6 million tonnes in 2013.

Teck predicted Thursday that its coal production this year will be in the range of 26.5 million and 27.5 million tonnes.

Benchmark Asian prices for coking coal have tumbled to $117 (U.S.) a tonne, down 65 per cent from their 2011 peak.

But Teck executives point out that their five mines in southeastern British Columbia and one in Alberta are low-cost producers. Last year, the company had coal site costs of $54 (Canadian) a tonne and transportation costs of $38 a tonne for total of $92 a tonne, leaving Teck with a profit margin during depressed times in the coal industry.

The diversified miner, which also operates copper and zinc mines, said Thursday that it posted a fourth-quarter profit of $129-million, down from $232-million in the same period of 2013. Adjusted quarterly earnings per share fell to 20 cents from 40 cents. Analysts had predicted adjusted EPS of 23 cents for the latest quarter.

For the full 12 months, Teck's profit slid to $362-million last year, compared with $961-million in 2013. Revenue declined to $8.6-billion last year from $9.4-billion in 2013. "In U.S.-dollar terms, annual coal and copper prices in 2014 were down 23 per cent and 7 per cent, respectively," the company said.

Analysts say Teck's board of directors will review the miner's dividend rate midyear, noting that with commodities priced in U.S. dollars, that is favourable for Teck's revenue. The current annual payout rate is 90 cents a share.

TD Securities Inc. analyst Greg Barnes pointed out that Teck is expected finish this year with more than $1-billion in cash.

During a conference call with analysts, Teck chief executive officer Don Lindsay said that if coal prices don't rise significantly, "then we may decide to be a bit more conservative and retain the cash that otherwise would have been used for dividend. In the end, it's a capital allocation decision."

Mr. Lindsay also confirmed Teck's commitment to the Fort Hills oil sands joint venture in Alberta led by Suncor Energy Inc., which holds a 40.8-per-cent stake. Total E&P Canada Ltd. has a 39.2-per-cent interest while Teck owns 20 per cent in the Fort Hills project, roughly 90 kilometres north of Fort McMurray.

"I would like to emphatically state that short-term oil price weakness does not affect our decision to proceed with a 50-year project. And Suncor has also reiterated their commitment to the Fort Hills project, Suncor being the operator," Mr. Lindsay said. "The economics of this project are quite robust."

Teck shares rose $1.12 Thursday to $18.73, but that closing price is down 71 per cent from the record high of $64.62 in January, 2011.

Teck has committed to sending 19 million tonnes annually of coal through Westshore Terminals Investment Corp., located at Roberts Bank 35 kilometres south of Vancouver, for the next six years.

"We have negotiated decent contracts with our customers, who have their own arrangements with customers in a variety of different countries," Nick Desmarais, Westshore's vice-president of corporate development, said in an interview "We have a lot of long-term contracts."

Westshore shipped roughly 31.3 million tonnes of coal last year, close to its capacity of 33 million tonnes. This year, it forecasts exporting between 31 million and 32 million tonnes.

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