Teck Cuts Spending Plans as Global Uncertainties Hit Commodities

(Bloomberg) -- Teck Resources Ltd. started a companywide cost-cutting program and will defer some planned capital projects as global economic uncertainty weighs on the prices of its commodities.

• The company is targeting reductions of about $500 million from previously planned spending through the end of 2020, according to its third-quarter results statement.

Key Insights

• Part of the cost reduction will come from staffing cuts. The company plans to eliminate about 500 full-time equivalent positions, including through attrition and allowing temporary and contract jobs to expire.
• Teck said a year-on-year decline in third-quarter profit was mostly due to weakening commodity markets for its principal products, in particular steelmaking coal.
• The miner also warned that costs in its steelmaking coal business will increase significantly in the first quarter of 2020, as a result of planned plant outages. Expenses should drop back down again later in the year.

CEO Comment

• “Over the past few years, we have focused our attention on maximizing production to capture margin during periods of higher commodity prices,” said CEO Don Lindsay.
• “However, current global economic uncertainties are having a significant negative effect on the prices for our products.”

Get More

• Key Figures here
• Statement here

To contact the reporter on this story: Liezel Hill in Johannesburg at lhill30@bloomberg.net

To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net, Renee Bonorchis

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