Mining firm will defer equipment purchases, reduce spending on development projects and delay the restart of its Quintette coal mine in B.C.
VANCOUVER—Teck Resources Ltd. is planning to eliminate 600 positions from its global workforce, delay the restart of a B.C. coal mine and cut spending by five per cent after posting a $105-million adjusted profit for the first quarter, less than half what it made during the same period last year.
The Vancouver-based mining company has been coping with low prices for commodities such as copper and coal, and adjusted its first-quarter profits, which are down from $328 million compared to the same period in 2013.
Revenue also fell more than analysts projected, dropping to $2.084 billion from $2.33 billion. Analysts had estimated Teck would have $2.098 billion of revenue for the quarter.
Its net profit attributable to shareholders was $69 million (12 cents per share) compared with $319 million (55 cents per share) a year ago.
The company says it will reduce its global workforce about five per cent through attrition, hiring freezes and reductions in contractors and employees. It’s also targeting a five per cent reduction in other costs for total savings of about $200 million and will reduce capital spending by about $150 million.
Teck Resources says it will defer equipment purchases, reduce spending on development projects and delay the restart of its Quintette coal mine in British Columbia until market conditions are more favourable.
The company says coal and copper prices in U.S. dollar terms were lower by 19 per cent and 11 per cent, respectively, in the first quarter compared with a year ago. Coal prices are at their lowest level since 2007 and margins are at their lowest level in 10 years.
The company said its Fort Hills oil sands project is progressing on schedule and on budget.