Vancouver – As part of its efforts to wrestle down nearly US$10 billion of debt, Teck (TCK. B-T, TCK-N) will suspend operations at the Pend Oreille zinc mine in northeastern Washington two months from now.
About 165 employees will be out of work.
The move stems from cost-saving measures announced in late November that included asset sales and reduced zinc and lead production at its Trail metallurgical complex in central BC, about 80 km north of the Pend Oreille mine.
The closure does not come as a complete surprise as the underground mine, which supplies zinc and lead to the Trail facility, has been operating at a loss for about two years.
Back in 2007 Teck warned in its annual report that after depreciation and amortization the Pend Oreille mine “is not expected to generate profits…during the remainder of its life at current zinc prices.”
Teck reported a $6 million operating loss that year and in the nine months ending Sept. 30, 2008, the loss increased to $10 million.
As recently as 2006 the mine was a money-maker, with record profits of $38 million that year.
Poor ore grades contributed to the loss in 2007 and although Teck had hoped ore grades in 2008 would curb further losses deteriorating zinc prices snuffed that optimism.
Pend Oreille accounted for about 1% of Teck’s 292 million tonnes of zinc and 0.5% of its 76 million tonnes of lead produced in 2007.
On the news of the impending mine closure Teck’s share price rose 20¢ to close at $5.65.
Be the first to comment on "Teck to close Pend Oreille zinc mine"