Teck reacts to depressed coal prices by halting production at Canadian mines
Canada's largest diversified miner Teck Resources (TSX:TCK.A, TCK.B), (NYSE: TCK) announced Thursday it will implement temporary halts at its six Canadian steelmaking coal operations for about three weeks during the third quarter of the year.
The move, said the Vancouver-based company, will allow it to align production and inventory with changing coal market conditions. The miner added it will consider additional production adjustments over the course of 2015.
The suspension will reduce third-quarter production by about 1.5 million tonnes, or 22%, to 5.7 million tonnes. Annual coal production is now estimated at 25 million tonnes to 26 million tonnes.
“Rather than push incremental tonnes into an over-supplied market, we are taking a disciplined approach to managing our mine production in line with market conditions,” Don Lindsay, President and CEO said in the statement. “We will continue to focus on reducing costs and improving efficiency to ensure our mines are cash positive throughout the cycle and well-positioned when markets improve.”
Last month, Teck decided to cut its dividend to shareholders from $0.45 per share to $0.15 starting June 15 to weather weak prices that the company attributes to global oversupply.