Teck announces impending layoffs

“There will be a five per cent reduction in Trail’s work forces between now and the end of 2016.” ~ Catherine Adair, Teck

Layoffs are coming for employees of Teck Trail Operations.

Low commodity prices are forcing the action, but just how many will be out of work locally depends on the number of workers who leave by choice.

The Vancouver-based company announced Tuesday that 1,000 positions will be eliminated across Teck’s global offices and operations, which trickles down to almost 80 jobs in the Trail plant.

“There will be a five per cent reduction in Trail’s work forces between now and the end of 2016,” confirmed Catherine Adair, Teck Trail’s community relations leader.

“Trail’s current workforce is just under 1,500 employees so this translates to a reduction of between 70 and 80 positions,” she added. “While every effort is being made to achieve these reductions through attrition, there will be some layoffs.”

The company states layoffs and attrition includes senior management positions, and brings total labour force reductions over the past 18 months, to approximately 2,000 positions.

Another significant way the company is cutting back and retaining capital next year, is by delaying projects and reducing subsequent operating costs.

A total reduction of $650 million will be achieved through $350 million of project deferrals and capital spending, as well as $300 million in cost savings from the 2016 operating budget.

The two large capital projects currently under construction in Trail, those being the water treatment plant and smelter recycle building, haven’t been affected at this point.

“In any given year Trail has many capital projects underway,” Adair clarified. “Trail’s capital plan is being closely reviewed and some projects have been deferred to reduce 2016 capital spending,” she explained.

“We are continuing with those projects that are essential to ensuring Trail operates in a safe manner and still meets our production targets and our environmental requirements,” Adair confirmed.

“Projects under construction such as the Groundwater Treatment Plant project and the Smelter Recycle Building are continuing at this time.”

Commodity prices have plagued the company all year, and due to a large write down of its coal and other assets, last month Teck reported a third quarter loss of $2.1 billion.

While Trail may have dodged a bullet for now, in terms of ongoing capital projects, the East Kootenay was not so lucky.

Teck said it will withdraw from its Coal Mountain Phase 2 project, located near Sparwood, thereby halting the environmental assessment process and suspending further work at the site.

That means mining will end at the existing Coal Mountain Operations within two years.

Between now and the end of 2017, the company says it will look for options 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,” Don Lindsay, Teck’s president and chief executive said in the statement.

“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 Resources also announced a cut to Dec. 30 dividends to five cents per share. That compares with an earlier semi-annual payment to shareholders of 15 cents.