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VANCOUVER — Teck Resources Ltd. is facing its worst financial squeeze since the recession, forcing the company to retrench during a mining industry slump that has hammered coal exports from Canada.
Vancouver-based Teck is cutting 1,000 jobs and lowering its semi-annual dividend to only 5 cents a share as it seeks to corral expenses amid depressed commodity prices.
The diversified mining company will eliminate the jobs at its offices and operations worldwide through layoffs and attrition, representing almost 10 per cent of its current work force. Including the latest move to chop jobs, Teck has announced the loss of 2,000 positions over the past 18 months.
Low commodity prices for coal, copper and zinc have ruined financial results at Teck, which lost $2.1-billion in the third quarter after a massive writedown on the value of its assets. Having watched Teck nearly collapse during the 2008-09 recession, executives are being cautious about conserving cash, especially given the miner’s commitment to help pay for the $15-billion Fort Hills oil sands project in Northern Alberta.
In early 2015, Teck had already poured $919-million into Fort Hills, part of its anticipated contribution of almost $3-billion for a joint venture that is slated to begin oil production in late 2017. While cash will still be funnelled to Fort Hills, Teck will scale back total spending elsewhere in 2016 by $650-million, including $350-million in capital expenditures.
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