EDMONTON, Alta. LUSCAR LTD. intends to suspend production at its Obed Mountain mine, 30 km east of Hinton, Alta., for an indefinite period beginning in April 2003. The move is in response to an oversupply of thermal coal in international markets, which has significantly reduced prices.
Obed Mountain mine has a workforce of about 110 people. The mine began operations in 1984 and serves domestic and international customers. In 2002, Obed Mountain mine produced 1.1 million tonnes of bituminous thermal coal.
An orderly reduction of production at Obed Mountain mine has already begun, while steps are taken to idle equipment and operations. Luscar's president and CEO, Reg Toliver, said the company intends to pursue other opportunities to market coal from Obed and could therefore resume production in the future. A limited number of employees will be retained to continue land reclamation activity for those areas not required for future mining.
Luscar also plans a three-week temporary shutdown in April at its Coal Valley mine near Edson, Alta., to reduce coal inventory levels. Export market conditions do not impact the rest of Luscar's business, the majority of which is to supply coal to domestic power stations under long-term contracts.
Luscar Ltd. is Canada's largest producer of low-sulphur thermal coal, and operates 10 thermal coal mines in Alberta and Saskatchewan. It is owned by the LUSCAR ENERGY PARTNERSHIP (LEP), a partnership of SHERRITT INTERNATIONAL CORP. and ONTARIO TEACHERS' PENSION PLAN. During 2002, LEP reported revenues of $597 million and net earnings of $32.3 million, on shipments of 36 million tonnes. For more information about the company, contact Joanne Miller, director of public relations, at 780-420-4087 or www.luscar.com.