Canada's Teck Cominco cuts 1,400 jobs

Canadian metals miner Teck Cominco Ltd. is cutting 1,400 jobs around the world, or 13 percent of its work force, to help it deal with a global sell-off in commodities.

The Vancouver-based company, the world's largest producer of zinc and metallurgical coal, said Thursday the cuts will also help eliminate redundancies after its acquisition of Fording Canadian Coal last year.

About 1,000 employee and 400 contractor positions will be eliminated by the end of 2009, most of the cuts coming in the first quarter.

The company also said it will reduce coal production in 2009, due to declining global steel demand.

"Given continued economic uncertainty, a significant reduction in our work force is needed to further reduce costs and position Teck for both short and long-term competitiveness," Don Lindsay, President and CEO, said in a statement. "Notwithstanding the substantial decline in commodity prices, this was a difficult decision and I want to thank the affected employees for their contributions to the company."

Teck Cominco hopes the moves will save it about $71 million a year, and it will take a one-time charge of about $29 million for severance and other related costs.

Teck Cominco announced the $12 billion purchase of Fording Canadian Coal in July, just a few months before the global sell-off of commodities. There are doubts about the company's ability to repay the debt on the deal.

In December, Teck Cominco said it will temporarily shut down the Pend Oreille zinc mine in Washington state in February due to low metals demand, laying off 165 employees. The closure follows a reduction of refined zinc production at Teck Cominco's Trail, British Columbia, operations, the primary customer of the Pend Oreille's mine production.

The company has said it will suspend dividends, slash capital spending and sell assets to save more than a billion dollars as a first step to help pay down its debt.

Teck Cominco's shares fell 31 cents, or 4.9 percent, to $6.01 in morning trading. The stock is down 88.2 percent from a 52-week high of $53.68.