Teck Resources announced this week that it is implementing additional measures to reduce costs and conserve capital. The company will reduce spending by $650 million in 2016 by deferring or reducing $350 million in capital spending reductions, and cutting $300 million in operating costs. Teck will eliminate an additional 1,000 positions across its global offices and operations through a combination of layoffs and attrition. This includes a reduction in senior management positions and brings the company’s total labor force reductions over the past 18 months to approximately 2,000 positions.
“We are implementing these additional measures to conserve capital, lower our operating costs and maintain financial flexibility in light of very difficult market conditions,” said Don Lindsay, president and CEO. “These steps build on our ongoing cost reduction program and I want to thank all employees for their efforts to improve efficiency and productivity, while remaining keenly focused on safety and sustainability.”
Teck will also withdraw the Coal Mountain Phase 2 (CMO Phase 2) project from the environmental assessment process and suspend work on the project, which means mining will conclude at the existing Coal Mountain Operations in the fourth quarter of 2017. Teck will identify options between now and the end of 2017 to potentially replace the 2.25 million metric tons (mt) of annual coal production that were planned from CMO Phase 2 by optimizing production from its five other met coal mines.