Vancouver, BC — Canadian National Railway announced it has signed a long-term rail agreement with Teck Resources to ship steelmaking coal from Teck’s four B.C. operations between Kamloops and Neptune Terminals, and other west coast ports.
The agreement runs from April 2021 to December 2026, and will enable Teck to significantly increase shipment volumes through an expanded Neptune Terminals. The agreement also provides for investments by CN of more than $125 million to enhance rail infrastructure and support increased shipment volumes to Neptune.
“This agreement and the associated infrastructure investment will provide us with rail capacity to match the major upgrades underway now at Neptune Terminals,” said Don Lindsay, president and CEO of Teck. “We expect this will lower our total transportation costs and improve overall rail and terminal performance.”
“CN is proud to sign this agreement with Teck and to be playing such a significant role in moving the steelmaking coal from Kamloops to the last mile at Neptune Terminals on Vancouver’s north shore,” said JJ Ruest, president and CEO of CN.
The deal replaces CP’s ten-year agreement with Teck, which expires at the end of March 2021. According to a statement from CP, the railway will continue to serve Teck at the respective originating mine sites.
“The movement from the mine sites to Kamloops represents approximately two-thirds of the journey Teck’s coal makes along CP’s network today. Based on CP’s current estimates and assumptions with respect to its performance and financial condition, CP estimates that this change in length of haul for the affected volume could, without the addition of offsetting volumes, negatively impact earnings by approximately 1 percent in 2021.”
“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,” said CP president and CEO Keith Creel. “This announcement will allow us to focus on other, value-added opportunities from Kamloops to Vancouver. We are excited about the capacity opportunities this creates for us, to and from the west coast, and look forward to finding win-win opportunities for other customers within this integral corridor.”