The company plans to trim the workforce by about 5 percent through attrition, hiring freezes and reductions in contractors, Vancouver-based Teck said today in a statement. Combined with other cost reductions, the job cuts will save about C$200 million ($182 million).
Teck, the world’s second-largest exporter of seaborne coal used in steelmaking, has been seeking to cut costs since the second half of 2012 amid slower economic growth in China. Teck sold coal for an average of $131 a metric ton in the first quarter, down 19 percent from a year earlier, according to the statement.
“We are increasing our efforts on reducing our costs and capital spending in order to ensure we maintain our competitiveness and emerge stronger from the current price cycle,” the company said.
Teck also said it would defer the restart of its Quintette coal mine in British Columbia until market conditions become more favorable.
“Coal prices are currently at their lowest level since 2007 and margins are at their lowest level in ten years,” Teck said.
The company, which also mines copper, zinc and molybdenum, plans to proceed with the restart of its Pend Oreille zinc mine in Washington State as the outlook for the metal improves.
Teck rose 2.4 percent to C$24.59 at the close in Toronto. The shares have fallen 11 percent this year.
First-quarter net income fell to C$69 million, or 12 cents a share, from C$319 million, or 55 cents, a year earlier, Teck said in the statement. Profit excluding one-time items such as coal inventory writedowns was 18 cents a share, less than the 25 cent average of 25 estimates compiled by Bloomberg.
Sales dropped 11 percent to C$2.08 billion from C$2.3 billion a year earlier.
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