Teck opting for CN to haul coal from Kamloops
Teck Resources will be changing how it ships coal to port in Vancouver.
Freight Waves magazine reports the company will be switching to Canadian National Railway (CN) from Canadian Pacific Railway (CP) in March 2021 when CP’s 10-year contract to haul metallurgical coal from Teck’s four Elk Valley mining operations to the West Coast expires.
The change will take place at Kamloops and CP will continue to move Teck’s coal from the Elk Valley to Golden and then to Kamloops.
The contract will run from April 2021 to December 2026.
“The companies didn’t share financial terms, but CN will invest more than $125 million to enhance rail infrastructure in anticipation of the higher volumes from Teck,” Freight Waves reported.
“This agreement and the associated infrastructure investment will provide us with rail capacity to match the major upgrades underway now at Neptune Terminals,” said Teck CEO Don Lindsay. “We expect this will lower our total transportation costs and improve overall rail and terminal performance.”
In response to the Dec. 4 announcement, CP said it expects the transition to “negatively impact” CP’s 2021 earnings by one per cent because of the change in length of haul, Freight Waves noted.
“There is a significant amount of work required to ensure that the interchange at Kamloops is capable of accommodating the additional interchange volume in April 2021, and CP expects that all stakeholders will do their part,” said CP CEO Keith Creel. “We will be working hard between now and Q1 2021, and beyond, to protect our fluidity through Kamloops for all shippers dependent on this critical corridor.
“We have long valued Teck as a customer and will continue to be an important supply chain enabler for them from their mine sites to our interchange with CN at Kamloops,” Creel said.
Lead image: A CP coal train rolls through Bummer Flats. e-KNOW file photo