Canadian mining giant Teck Resources (TSX:TCK.A, TCK.B), (NYSE: TCK) has decided to cut 1,000 jobs, or around about 9% of its global workforce, through a combination of layoffs and attrition as part of a plan to reduce spending next year by $650 million.
The Vancouver-based company, the largest producer of steel-making coal in North America, said the cuts will include senior management and brings its total job cuts over the past 18 months to about 2,000 positions.
Hit by slumping commodities, particularly by the sustained drop in coal and copper prices, Teck will also have to slash its semi-annual dividend rate to 5 cents a share in December. The fresh cut follows an April dividend reduction from $0.45 per share to $0.15, which was followed by cuts in production and inventories of steel-making coal.
“We are implementing these additional measures to conserve capital, lower our operating costs and maintain financial flexibility in light of very difficult market conditions,” Chief Executive Don Lindsay said in a statement.
More cost cutting
The company also plans to withdraw its Coal Mountain project, in southeastern British Columbia, from the Environmental Assessment process and suspend further work on it in a bid to save cash.
The suspension of the project will means that mining will end at the existing Coal Mountain operations in the fourth quarter of 2017.
The announcements add to the list of cost-saving measures Teck has taken this year. In August, it decided to partner with Vancouver-based Goldcorp (TSX:G), (NYSE:GG) and combine their Relincho and El Morro copper-and-gold projects in Chile.
And early in October the company agreed to sell future silver production on its Antamina mine in Peru to Franco-Nevada (NYSE:FNV). The so-called streaming deal includes a $610 million upfront payment.