THE CANADIAN PRESS

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VANCOUVER, B.C. - Western Canadian Coal Corp. (TSX:WTN), a Vancouver-based coal producer, says it plans to reduce operations at its Brule mine and Wolverine operation in British Columbia, affecting hundreds of jobs, because of reduced demand from steelmakers.

Western Canadian 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.

The company said 35 of its contractor's employees will be impacted at Brule mine near Chetwynd, B.C.

It said the number of jobs impacted 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 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 CEO 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 Coal 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 northern B.C.

The world's steelmakers 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.

The latest cuts come a few days after Western Canadian announced it has agreed to lend US$36 million to a subsidiary of Cambrian Mining, the company's primary shareholder and future merger partner.

Western Canadian Coal said the financing will help Cambrian Investment Holdings Ltd. repay its debt to a British bank.

In December, Western Canadian Coal and Cambrian announced a merger agreement valued at $52 million intended to help both companies weather the global economic turmoil.

Cambrian, a British coal and gold mining company, already owns about 34 per cent of Western Coal's shares.

Western Canadian Coal shares were trading down 20 cents or 18.6 per cent at 87 cents on the Toronto Stock Exchange Tuesday.