Teck Resources to reduce workforce and delay re-opening of BC mine

22 April 2014 (Last Updated April 22nd, 2014 18:30)

Canada-based mining and mineral development firm Teck Resources will reduce its global workforce by 5% representing 600 positions, to reduce costs and cope with the lower prices of coal and copper.

Canada-based mining and mineral development firm Teck Resources will reduce its global workforce by 5%, or 600 positions, to reduce costs and cope with the reduced prices of coal and copper.

The price slump is mainly due to the drop in demand for electricity-making thermal coal and steelmaking metallurgical coal, following the extensive use of shale gas.

Weak commodity prices affected Teck's three main business units of coal, copper and zinc, with coal being hit hardest by increased supplies from Australia and reduced demand from China.

During the first quarter of the year, the company posted an adjusted profit of $105m, compared with $328m for the corresponding quarter in 2013.

"Teck will cut its workforce through attrition, hiring freezes and reducing contractors and employees, and plans to reduce 5% in other costs."

Tech Resources president and CEO Don Lindsay said that the weak prices for these commodities has resulted in lower profits and cashflows than last year.

"As a result, we are increasing our efforts to reduce our costs and capital spending," Lindsay said.

The company is currently undertaking a cost reduction programme which has resulted in $345m of annualised reductions to date and aims to reduce this by a further $200m, with $150m of capital expenditure reductions.

Under its cost cutting programme, Teck will cut its workforce through attrition, hiring freezes and reducing contractors and employees, and plans to reduce 5% in other costs, for a total saving of around CAD200m ($181.3m).

The majority of job cuts will be in Teck's coal business with around 80 jobs from the Quintette project, claimed the company.

The company has also delayed the re-opening of its Quintette coal mine in north-east British Columbia, as it could not obtain two permits, which would allow the mine to restart in a year's time.

Teck will continue with its oil sands project in Alberta and will restart the Pend Oreille zinc mine in Washington State, which has been idle since 2009. The mine has contracts to supply 5.5 million tonnes of coal at $120m per tonne.

The decision to reduce the Teck Reosurces workforce came one week after Walter Energy announced plans to lay-off 415 miners from its Tumbler Ridge mine and another 280 from a mine in Chetwynd.

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