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Teck Cominco Ltd. is suspending dividends next year, saving an estimated $486-million, and cutting budgeted capital expenditures by $730-million.

Vancouver-based Teck, Canada's largest base metals miner, also announced Thursday the sale of its interest in the Lobo-Marte gold property in Chile, and a reduction in zinc production at its operations in Trail, B.C.

“Current global economic and financial market conditions dictate that we take all prudent steps available to us to significantly reduce spending,” Don Lindsay, Teck's president and chief executive officer, said.

“The measures announced today, combined with previously announced tax savings, amount to $2.4- billion and should significantly enhance our ability to address our near-term debt obligations and better position Teck to refinance the bridge loan [to finance the acquisition of Fording Canadian Coal Trust] when conditions improve.”

Teck said it has already paid down $210-million (U.S.) of the bridge loan to finance its takeover of Fording Coal and “will actively pursue several other aspects of its comprehensive debt reduction plan, including other asset sales.”

Teck found itself in a severe bind when commodity prices collapsed shortly after it had completed a $14-billion takeover deal for Fording.

A looming global recession decimated metal prices at a time when Teck had loaded itself up with $9.8-billion in debt, including a $5.8-billion short-term bridge facility to pay for the takeover.

Thursday's announcement outlined the first concrete steps Teck is taking in its debt reduction plan, including the suspension of dividends on its Class A common shares and Class B subordinate voting shares.

It is selling its 60 per cent interest in the Lobo-Marte gold project in Chile to Kinross Gold Corp. for $40-million in cash and $70-million in Kinross common shares, the company said, and expects to record a pre-tax gain of approximately $135-million on the transaction, which is expected to close at year end.

The company has also withdrawn from the Petaquilla copper project in Panama and therefore has no funding obligations in respect to this project. In a separate announcement, Inmet Mining Corp. said it had acquired Teck's stake in the mining project for $30-million.

Under the deal, Inmet will acquire Teck Cominco's 26 per cent interest in Minera Panama S.A., the Panamanian company that owns the Petaquilla project.

The transaction is slated to close in early December and would give Inmet 100 per cent ownership of the Petaquilla development.

Teck said its Trail, B.C. metallurgical operation will reduce refined zinc production by approximately 4,000 to 5,000 tonnes per month effective immediately in response to changing market conditions.

“This 20 per cent reduction in production will still leave us with sufficient metal to meet customer needs. The duration of this curtailment depends on market conditions, but will likely continue for at least six months.”

The demand for coal is also falling because global steel production is down, the company said.

“Accordingly, Teck now expects that coal sales for 2008 will be near the lower end of the range of its guidance of 23 to 25 million tonnes,” the company said.

Lead production at Teck's Trail, B.C. smelter will not be affected, and power sales are expected to increase.

Teck said its operations have been well capitalized in recent years, “creating an opportunity to defer sustaining capital costs while ensuring operations are maintained to a high standard.”

Earlier this week, Teck and other members of Fort Hills oil sands consortium deferred a decision on whether to build a $13.9-billion oil sands mine and put plans to build a $9.9-billion upgrader on hold indefinitely.

This “will significantly reduce Teck's capital spending for 2009,” the company said.