Teck Resources Ltd announced sweeping changes in its senior ranks on Tuesday, including the retirement of its chief operating officer.
In an unrelated announcement, the copper, coal and zinc producer was downgraded by Moody’s Investor’s Services, which pointed to the impact of continued low commodity prices on its balance sheet.
“The rating action reflects Moody’s view that there has been a fundamental downward shift in the mining sector with the downturn being deeper and the recovery longer than previously expected,” the credit rater said in a press release that announced it was lowering Teck’s rating to B3 from the previous Ba3.
Both ratings are below investment grade but the downgrade pushes Teck’s debt even further into high-risk territory. “Obligations rated B are considered speculative and are subject to high credit risk,” according to a Moody’s document.
Teck’s stock, which had been on a tear in recent days, reversed course on Tuesday and fell 11.2 per cent. The Vancouver-based miner has endured a painful year as commodity prices have tumbled and it has faced the need to finance its portion of the Fort Hills oil sands project.
Moody’s said slowing growth in China is pinching demand for base metals, while falling rates of steel production are hurting demand for iron ore and metallurgical coal. All of that will put additional pressure on Teck, which is already wrestling with elevated levels of debt.
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