Coal production was down 700,000 tonnes to 5.7 million tonnes on the quarter – similar to the same period a year ago – but increased costs of production and decreased average coal price kept sales performance in check.

Teck reported that although sales volumes rose to 6.7Mt in the period compared to 5.6Mt last year, the average price of a tonne of coal dropped 26% since last year to only $202.

A nine-day disruption of service from Canadian Pacific Railway was also cited as a cause of the loss in production as rail operations from the Elk Valley mines were completely shut down.

Teck president and chief executive Don Lindsay said the company was still planning to increase coal production.

“We are pleased with our operating results for the second quarter, with record quarterly copper production, a significant increase in coal sales compared with the last quarter and settlement of labour agreements at our Trail and Cardinal River operations,” Lindsay said.

“Notwithstanding these increases, commodity prices were lower due in part to uncertainty over global economic conditions, resulting in lower profits compared with the second quarter last year.

“However, our balance sheet remains strong with $3.6 billion of cash, which positions us to continue advancing our longer term growth plans.”

Teck’s coal growth plans include the reopening of the Quintette mine in northeast British Columbia, increasing production capacity at Line Creek in southeast BC and an expansion of the Neptune bulk terminal’s throughput capacity from 9Mt to 15Mt.

Teck said it had reached agreements with customers to sell 5Mt of coal in the third quarter of 2012 and it expected to conclude additional sales over the course of the quarter.

While the price for the company’s premium coal has been set at $225 per tonne, the average price for all coal products is $198/t.