Teck Resources cutting B.C. jobs after price of coal plunges

Coal workers in British Columbiaare bracing for leaner times.

The price of metallurgical coal, which is used to make steel,has fallen by about 40 per cent since the summer and Teck Resources, which operates four mines in the province's Elk Valley region, is warning employees there will be layoffs.

In a letter dated Sept. 26from Robin Sheremeta, Teck'ssenior vice president of coal, to all employees at the four operations, the company noted the price of coal had dropped from approximately $210 per tonne to about $130 per tonne in a few weeks.

The letter outlined Teck's plans to save money, which includean immediate salary and hiring freeze, reduced and deferred training and job losses.

Dean McKerracher, the mayor of Elkford, B.C., a community in the Elk Valley, worked at Teck for 32 years and said the cuts are certainly going to hurt Elkford residents, many of whom depend on the companyfor a paycheck.

"They'll do whatever they have to do to trim the fat, so to speak, for their operations," said McKerracherTuesday in a phone interview on CBC's Daybreak South. "They'll lay off as many employees as they can."

Oversupply and market uncertainty

Warren Mabee,director of the Institute for Energy and Environmental Policy at Queen's University, said the price for all kinds of coal, including thermal coal which is burned for electricity, has gone down in the last eight to 10 months. He said this drop is due to oversupply and market uncertaintystemmingfrom Brexit and ongoing trade disputes between the United States and varioustrading partners.

Mabee called Teck's letter "not surprising" given current conditions but suggested the market could stabilize "in the next month or so" ifthings become clearer concerning Brexit.

The last time the Vancouver-based mining company experienced a similar downturn that impacted Elk Valley was in 2015 when Teck cut nine per cent of its workforce in response to low commodity prices.

"We've been through it before and we'll weather the storm again" saidMcKerracher.

The mayor said while someElkford residents will stay put and try to "live day-to-day,"otherswill likely leave the community to find other work.

According to Teck's letter, the company has already lost an "unprecedented" 80 per cent of its profit margins in four months.