Canada-based Teck Resources is planning a $650m reduction in total spending during 2016 through $350m of capital cuts and another $300m in operating cost savings.
The company’s latest decision comes in response to persistent weak commodity prices, and the reductions have been identified as part of the 2016 operating budget.
As part of its plans, Teck Resources will remove an additional 1,000 positions across its global offices and operations, including senior management positions.
This would bring the total redundancies to around 2,000 during the past 18 months.
Teck Resources will also withdraw the Coal Mountain Phase 2 (CMO Phase 2) project from the environmental assessment process and further suspend work on it.
According to the company, the 2016 capital budget is still under review.
Teck Resources president and CEO Don Lindsay said: "We are implementing these additional measures to conserve capital, lower our operating costs and maintain financial flexibility in light of very difficult market conditions.
"These steps build on our ongoing cost reduction programmr and I want to thank all employees for their efforts to improve efficiency and productivity, while remaining keenly focused on safety and sustainability."
Following the suspension of CMO Phase 2, mining will come to an end at the existing Coal Mountain Operations in the fourth quarter of 2017.
In order to potentially replace the 2.25 million tonnes of coal production a year planned from the project, the company proposes to identify options by the end of 2017 through optimising production from its five other steelmaking coal mines.
In May, Teck Resources announced the temporary shutdown of its six steelmaking coal operations in Canada for around three weeks to align production and inventories with changing coal market conditions.
Image: Teck Resources’ decision to reduce total spending comes in response to persistent weak commodity prices. Photo: courtesy of duron123/FreeDigitalPhotos.net.