A flood of thermal coal on international markets has squeezed prices and forced Luscar to suspend production at its Obed Mountain mine, 30 km west of Hinton, Alta.
Canada’s largest coal producer says it is unable to run the mine at today’s low prices for export thermal coal.
The operation’s 110 employees will be layed off, though a small crew will stay on to perform reclamation work.
Luscar plans to include a $6.3-million provision for severance and other closure-related costs in its first-quarter report.
Meanwhile, Luscar has announced a 3-week shutdown at the Coal Valley mine, 80 km west of Obed Mountain. The move is intended to reduce coal inventory levels. Luscar expects sales volumes to increase during the second half of the year.
Luscar produces bituminous, sub-bituminous and lignite thermal coals from 10 surface mines in Alberta and Saskatchewan.
The company is owned by the Luscar Energy Partnership, an alliance between Sherritt International (S-T) and the Ontario Teachers’ Pension Plan.
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