News

— — Western Canadian Coal Corp. says it plans to reduce operations at its Brule and Wolverine mines in British Columbia, affecting hundreds of jobs, because of reduced demand from steel makers.

The company said Tuesday it will cut output at the Brule mine, which produces lower quality coal, to about 750,000 tonnes a year from its current rate of 1.3 million tonnes. The reduction is effective at the end of January.

Meanwhile, the Wolverine operation, which produces hard-coking coal, has informed employees it may cut operations effective May 18, subject to market conditions for the next coal year, the company said.

Western Canadian said 35 of its contractor's employees will be affected at Brule mine near Chetwynd, B.C.

It said the number of jobs affected at Wolverine, located just outside of Tumbler Ridge, B.C., is unclear at this stage, but that 300 of its contractor's employees and 100 of the company's own employees were given notice Tuesday.

The coal producer employed 530 people at the end of 2007.

Western Canadian also said it has given notice to the contractor at Wolverine to end the mining operation contract. The Wolverine operation has a current annual capacity of 1.6 million tonnes of coal.

The Vancouver-based company said the reduced operating rates reflect rising inventories as some customers defer shipments through the next few months. Western Canadian said it expects to operate at the lower rates until the current economic uncertainty improves and the demand for coal becomes clearer.

"I emphasize these plans are contingent on what the demand of metallurgical coal will be for the next coal year," said John Hogg, president and chief executive officer of Western Canadian.

"Whether we reduce operations and to what levels, will depend on the demand for our coal. We hope this will become clearer in the coming months. Until then, we continue to focus on working safely, increasing productivity and lowering costs to remain competitive through these difficult times."

Western Canadian produces metallurgical coal from mines in northeastern British Columbia. The company also has interests in various coal properties in northern and southern British Columbia and a 50-per-cent interest to explore and develop the Belcourt and Saxon group of properties in the north of the province.

The world's steel makers have been reducing demand for coal to fuel their blast furnaces because the slumping world economy has cut the prospects for growth in steel sales, especially in Asia.