The economic malaise in Asia is taking its toll on Hillsborough Resources (HLB-T), operator and 63%-owner of the Quinsam coal mine near Campbell River, B.C.
After consulting with Japanese partner Marubeni Coal Canada, the Vancouver-based company placed 103 union and 27 non-union workers on temporary layoff and scaled back the operation to two development and two de-pillar shifts, five days per week.
Hillsborough says production at this level will be “more than sufficient” to meet the needs of local customers and service a portion of demand from offshore customers.
The company also blamed “poor productivity” for the downsizing and says more export shipments may be made as productivity improves. In the meantime, Hillsborough is re-evaluating the mine’s proven and probable reserves in light of the curent world price.
In order to conserve cash, Hillsborough has placed its 1998 capital expenditure plans on hold, including further development of the T’Sable River coal reserve.
The company posted a net loss of $3.9 million (22 cents per share) in the first six months of this year, compared with a profit of $1.1 million (7 cents per share) a year earlier.
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