VANCOUVER – Mining company Teck Resources Ltd. (TSX:TCK.B) is cutting 1,000 jobs around the world through a combination of layoffs and attrition as part of a plan to reduce spending next year by $650 million.
The Vancouver-based company said the layoffs will include senior management and brings its total job cuts over the past 18 months to roughly 2,000 positions.
Teck Resources will also cut its dividend to be paid on Dec. 30 to five cents per share. That compares with an earlier semi-annual payment to shareholders of 15 cents.
The reduction in spending will include $350 million of capital spending cuts and deferrals and $300 million of operating cost savings.
Teck also said it will withdraw its Coal Mountain Phase 2 project from the environmental assessment process and suspend further work on the project in bid to save cash. The suspension of the project means that mining will end at the existing Coal Mountain operations in the fourth quarter of 2017.
The company says it will look for options between now and the end of 2017 to potentially replace the 2.25 million tonnes of annual coal production that were planned from the expansion project.
“We are implementing these additional measures to conserve capital, lower our operating costs and maintain financial flexibility in light of very difficult market conditions,” Teck chief executive Don Lindsay said in a statement late Tuesday.
“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, one of the country’s largest mining companies, has steelmaking, coal, copper, zinc and oilsands projects in Canada and around the world.
The company has been struggling with the drop in commodity prices and reported last month a $2.1-billion loss for its third quarter due to a large writedown of its coal and other assets.
Earlier this year, Teck temporarily shut down its six coal mines for three weeks to reduce supply and sold a share of silver production from its Antamina joint-venture in Peru.
The company also formed a joint venture with Goldcorp (TSX:G) in an attempt to reduce the cost of developing two megaprojects in Chile.
Goldcorp (TSX:G) will contribute its El Morro project and Teck (TSX:TCK.B) will add its Relincho project to the new Project Corridor joint venture, which will be owned 50-50 by the two companies.