Based on 2021 sustaining capital expenditure guidance of C$830 million, that cost was expected to rise to C$1,330 million for this year.
The indicated 2022 sustaining capex dwarfs BMO Capital Markets previous estimate of US$664 million, or about C$847 million.
While progress on the QB2 project was good in the December quarter - and it remains on track for a start-up in second half of 2022 - absenteeism rose in January because of a spike in COVID-19 cases. The Omicron strain caused internal revisions about the duration of negative effects.
Previously, Teck assumed the effects of COVID-19 would end before the completion of construction. It no longer does.
Costs rose as Teck managed the absenteeism, labour inefficiencies and contractual concessions.
"Based on our current assumptions, including with respect to exchange rates, we are updating our COVID-19 capital-cost guidance to US$900-US$1,100 million from our previous estimate of US$600 million," Teck said.
BMO Capital Markets analyst Jackie Pryzbylowski noted the COVID-19 guidance is an "additional" cost and QB2 development cost guidance remains unchanged at US$5.26 billion.
The company expected to spend about C$2.2 billion-C$2.5 billion of QB2 development capital on a consolidated basis this year, inclusive of COVID-19 capital.
Pryzbylowski now assumes a total capex spend of US$6.37 billion, up from US$6.17 billion, which brings BMO's cost estimate to the upper end of the total US$6.16 billion-US$6.36 billion, including COVID-19 costs.
QB2 is expected to have an initial mine life of 28 years and double Teck's consolidated copper production by 2023.
Pryzbylowski said Teck's warnings for 2022, made on January 27, came as a "meaningful negative surprise".
The company's closing share price on the New York Stock Exchange was down 6% from January 26 to US$30.70/share by January 29.
Teck also released unaudited fourth-quarter and 2021 sales and production results.
The company's steelmaking coal sales were 5.1 million tonnes, which was below the low end of previously revised guidance of 5.2-5.7Mt.
For 2021, steelmaking coal production was 24.6Mt, which is at the bottom end of the previously revised guidance of 24.5-25Mt.
Teck said ongoing weather conditions in British Columbia, Canada, had negatively affected logistics related to its operations.
Pryzbylowski said the weather had a greater impact than BMO expected and the December quarter production came in below consensus forecasts of 5.75Mt, and marginally below BMO's 5.2Mt.
Teck said demand for its coal remained strong, while its realised steelmaking-coal price averaged US$351/tonne in the December quarter. Pryzbylowski said this came in well below BMO's expectation of US$390/tonne.
"Coal shipment disruptions potentially impacted sales volumes sold on a premium CFR basis, and the timing of shipments in a quarter with significant price volatility likely impacted the actual price versus our estimates," Pryzbylowski said
Teck said the logistics chain disruptions had minimal effect on production at its Highland Valley Cooper operations, but they did result in sales of copper in concentrate from the operation being 5,600t lower than production in the fourth quarter.
"The shortfall in sales versus production volumes at Highland Valley Copper was partially offset by strong sales at our other operations, and total copper-in-concentrate sales were 1,500t lower than production in the fourth quarter," Teck said.
