UPDATE 4-Teck Resources to cut 5 pct of its workforce, restart zinc mine

Tue Apr 22, 2014 11:41am EDT
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* To restart Pend Oreille zinc mine at a cost of C$45 mln

* Quintette project put on care and maintenance

* Net profit falls 78.4 pct to C$69 mln (Adds quote from conference call, detail on unusual items)

April 22 (Reuters) - Teck Resources Ltd plans to cut about 600 jobs, or 5 percent of its global workforce, the diversified Canadian miner said on Tuesday, even as its first-quarter adjusted earnings came in ahead of expectations.

Teck also said it planned to resume production at its Pend Oreille underground zinc mine, which has been idle since 2009. The company said zinc has the best outlook of the base metals.

"Over a three-year period commencing last year, approximately 1.5 million tonnes of current zinc production will be closed due to mine depletion. This is a significant figure in a 13-million-tonne market," said Chief Executive Don Lindsay on a call with analysts and investors.

The capital cost of restarting Pend Oreille is pegged at about $41 million. Teck expects it will take seven months to prepare for restart and another five to reach full capacity.

The mine can produce 44,000 tonnes of zinc in concentrate per year, at average production costs of about 80 cents per pound of zinc. It has about five years of mine life left.

Net profit fell 78.4 percent to C$69 million, or 12 Canadian cents per share, in the three months to March 31, from C$319 million, or 55 Canadian cents per share, a year earlier, mainly due to weak coal and copper prices.   Continued...