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Teck to temporarily shut down production at Canadian operations

Reuters, Globe and Mail, May 28 2015

Teck Resources Ltd. said on Thursday it will implement temporary shutdowns at its six Canadian steel making coal operations for about three weeks in the third quarter, to align production and inventory with changing coal market conditions.

The Canadian miner said it will consider additional production adjustments over the course of 2015.

“Rather than push incremental tonnes into an over-supplied market, we are taking a disciplined approach to managing our mine production in line with market conditions,” chief executive officer Don Lindsay said in a statement.

The move will reduce third-quarter production by about 1.5 million tonnes, or 22 per cent, to 5.7 million tonnes, with sales seen in the range of 6 million to 6.5 million tonnes.

Annual coal production is now estimated at 25 million to 26 million tonnes, down from a February forecast of 26.5 million to 27.5 million tonnes.

Teck’s guidance for unit operating and distribution costs for the year is unchanged, but capitalized stripping is expected to be $65-million lower than forecast, due to lower production and diesel costs along with productivity improvements.

The miner said the shutdowns would be staggered over the summer months among the operations and that it would continue to meet all contracted and committed coal sales.