Teck Resources announces sweeping executive changes
In an unrelated announcement, the copper, coal and zinc producer was downgraded by Moody’s Investor’s Services, which pointed to the impact of continued low commodity prices on its balance sheet.
“The rating action reflects Moody’s view that there has been a fundamental downward shift in the mining sector with the downturn being deeper and the recovery longer than previously expected,” the credit rater said in a press release that announced it was lowering Teck’s rating to B3 from the previous Ba3.
Both ratings are below investment grade but the downgrade pushes Teck’s debt even further into high-risk territory. “Obligations rated B are considered speculative and are subject to high credit risk,” according to a Moody’s document.
Teck’s stock, which had been on a tear in recent days, reversed course on Tuesday and fell 11.2 per cent. The Vancouver-based miner has endured a painful year as commodity prices have tumbled and it has faced the need to finance its portion of the Fort Hills oil sands project.
Moody’s said slowing growth in China is pinching demand for base metals, while falling rates of steel production are hurting demand for iron ore and metallurgical coal. All of that will put additional pressure on Teck, which is already wrestling with elevated levels of debt.
The credit rating agency said its rating outlook for Teck is negative and warned the miner may face refinancing challenges after 2018.
If so, it will do so with many fresh faces in senior posts. The executive changes announced by the company on Tuesday include several of its most experienced executives.
Ian Kilgour, executive vice-president and chief operating officer, will retire on April 30, after five years with Teck. A three-decade veteran of the mining industry, he was previously president of Compania Minera Antamina.
Also retiring over the next few months are Rob Scott, senior vice-president, zinc; Ray Reipas, senior vice-president, energy; and Tim Watson, senior vice-president, project development. All of them have spent 30 years or more in the mining industry.
“As a result of these retirements, we have reorganized our management structure to ensure continued strong leadership across our business units, create a closer reporting relationship between our general managers and the senior executive, and further align the organization to the current business environment,’ Don Lindsay, Teck’s chief executive, said in a statement.
Dale Andres, currently senior vice president, copper, will become senior vice president, base metals, effective May 1. On the same day, Robin Sheremeta, currently vice president, operations, coal, will become senior vice president, coal.
On July 1, Alex Christopher, currently vice-president, exploration, will become senior vice-president, exploration, projects and technical services.