Teck to Shut Unprofitable Washington State Zinc Mine 2008-12-15 14:26:13.325 GMT
By Rob Delaney
Dec. 15 (Bloomberg) -- Teck Cominco Ltd., the world’s second-largest zinc producer, will temporarily shut one of its plants in the U.S. because of a drop in demand for the metal used to galvanize steel.
Operations at the Pend Oreille mine and mill complex near Metaline Falls, Washington, will be stopped in two months, Vancouver-based Teck said today in a statement. About 165 workers will receive severance pay after the site is shut.
Teck is under pressure to cut losses and raise cash to repay debt it used to acquire Fording Canadian Coal Trust for $13.5 billion this year. Teck’s acquisition of the metallurgical coal producer was part of Chief Executive Officer Don Lindsay’s strategy of reducing the company’s vulnerability to zinc prices, which were down 46 percent in the past year when the takeover was announced in July, while coal had more than doubled.
The closing is “a reflection of the challenging business environment we face,” Mike Agg, senior vice president of Teck’s zinc division, said in today’s statement.
Revenue at Pend Oreille fell to C$5 million ($4.08 million) in the three months ended Sept. 30, from C$20 million a year earlier, Teck said in its Oct. 22 earnings announcement. The site posted a C$8 million operating loss in the quarter after breaking even a year earlier.
Teck rose 18 cents, or 3.4 percent, to C$5.45 on Dec. 12 in Toronto Stock Exchange trading. The shares have plunged
87 percent since July 29, the day Teck agreed to buy Fording. |
