Vancouver-based Teck Cominco (TSX: T.TCK.B, Stock Forum) announced Monday that it is temporarily shutting its Pend Oreille operations in Washington.
The move comes as a result of reduced metal demand and the persistent weakness in zinc prices, says the company, and is an extension of a recent decision to reduce refined zinc production at Teck's Trail Operations.
"The temporary shutdown of the Pend Oreille mine is a difficult decision, but we must act prudently to balance production with declining zinc demand," said Mike Agg, senior vice president, zinc. "The employees at Pend Oreille have worked diligently to make the operation competitive and they are to be commended. However, today's announcement is a reflection of the challenging business environment we face. We recognize the impact of this temporary closure on the employees and the community and we will do our best to assist in the transition."
The closure affects 165 employees at Pend Oreille. The mine and mill complex, owned and operated by Teck’s wholly owned subsidiary, Teck Washington Incorporated, will continue to operate for the next two months, says the company. It will then move to a care and maintenance status “to ensure it meets all permit requirements and is in prime condition to return to production when market conditions improve.”
Late last month, the company also announced its plan to reduce debt, including suspending the dividend for 2009 on its Class A common shares and Class B subordinate voting shares, providing an estimated annual savings of approximately $486 million. The company also reduced budgeted capital expenditures by $730 million and reached and agreement to sell its 60% interest in the Lobo-Marte gold project in Chile.
Shares of Teck jumped 12.7% to $6.14 Monday.
