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A truck hauls a load at Teck Resources Coal Mountain operation near Sparwood, B.C. in a handout photo.

HO/THE CANADIAN PRESS

Teck Resources Ltd. is facing its worst financial squeeze since the recession, forcing the company to retrench during a mining industry slump that has hammered coal exports from Canada.

Vancouver-based Teck is cutting 1,000 jobs and lowering its semi-annual dividend to only 5 cents a share as it seeks to corral expenses amid depressed commodity prices.

The diversified mining company will eliminate the jobs at its offices and operations worldwide through layoffs and attrition, representing almost 10 per cent of its current work force. Including the latest move to chop jobs, Teck has announced the loss of 2,000 positions over the past 18 months.

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Low commodity prices for coal, copper and zinc have ruined financial results at Teck, which lost $2.1-billion in the third quarter after a massive writedown on the value of its assets. Having watched Teck nearly collapse during the 2008-09 recession, executives are being cautious about conserving cash, especially given the miner's commitment to help pay for the $15-billion Fort Hills oil sands project in Northern Alberta.

In early 2015, Teck had already poured $919-million into Fort Hills, part of its anticipated contribution of almost $3-billion for a joint venture that is slated to begin oil production in late 2017. While cash will still be funnelled to Fort Hills, Teck will scale back total spending elsewhere in 2016 by $650-million, including $350-million in capital expenditures.

"The actions highlight Teck's dedication to preservation of capital," RBC Dominion Securities Inc. analyst Fraser Phillips said in a research note Wednesday.

The coal market's decline has been especially severe over the past four years. Benchmark spot prices for metallurgical coal have tumbled to $73 (U.S.) a tonne from $300 in 2011.

Teck's Coal Mountain expansion plans have been shelved. Mining for steel-making metallurgical coal at the existing operation, in southeastern British Columbia, will shut down in the final quarter of 2017. Teck produces metallurgical coal at five southeast B.C. mines and one in Alberta.

The ripple effect has been felt at Ridley Terminals Inc.'s Prince Rupert operation, where exports of metallurgical coal in the first 10 months have plunged 60.5 per cent from a year earlier. The Crown corporation has suffered because shipments from other coal producers have plummeted from northeastern B.C.

"It's hurting. The entire coal sector is down," said Colin Metcalfe, Ridley's vice-president of corporate affairs.

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Analysts say Teck is under the most pressure it has experienced since temporarily suspending its dividend in late 2008. In mid-2009, China Investment Corp. came to Teck's rescue, and the dividend was restored in mid-2010. China's sovereign wealth fund owns more than 17 per cent of the miner's shares.

Slower-than-forecast economic growth in China has hurt demand for commodities.

TD Securities Inc. analyst Greg Barnes estimates that slashing the dividend will result in an estimated $120-million (Canadian) in annual savings. Teck's semi-annual dividend rate will be sliced to 5 cents a share in December. Earlier this year, the firm had already chopped the dividend to 15 cents from 45 cents a share in the payout to shareholders made once every six months.

Teck's 2016 belt-tightening includes reducing and deferring $350-million in capital spending while shaving $300-million from the operating budget.

"These steps build on our ongoing cost-reduction program," Teck CEO Don Lindsay said in a statement late Tuesday.

Mr. Lindsay has been steadfast in his support for the Fort Hills oil sands project, despite the hefty financing commitments.

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Fort Hills is led by Calgary-based Suncor Energy Inc., which holds a 50.8-per-cent stake. France's Total SA has a 29.2-per-cent interest, while Teck owns 20 per cent .

Teck spokesman Chris Stannell said the company's 2015 capital spending will come in at about $2.2-billion and next year's budget is still under review.

The company has been shipping metallurgical coal through Ridley from its Cardinal River mine in Alberta. Two firms that own northeastern B.C. coal mines – Birmingham, Ala.-based Walter Energy Inc. and London-based Anglo American PLC – were major shippers through Ridley in recent years.

But since 2013, Walter Energy has halted production at three mines and Anglo American suspended output at two sites in northeastern B.C., leaving the region without any operating coal mines. A sixth northeastern B.C. project, Teck's Quintette property, remains mothballed.

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