Government approves sale of Teck’s coal business to Glencore

Chamber of Shipping > Blog > News > Local > Government approves sale of Teck’s coal business to Glencore

Canada’s Industry Minister François-Philippe Champagne has approved Teck Resources Ltd.’s sale of a majority stake in its steelmaking coal business to Glencore – this includes the remaining 77% interest in the steelmaking coal business, Elk Valley Resources. The deal also includes Japanese company Nippon Steel Corp. acquiring a 20% stake in exchange for its interest in one of Teck’s coal operations and US$1.7 billion in cash, while South Korean steelmaker Posco would swap its interest in a pair of Teck’s coal operations for a 3% stake in the overall steelmaking coal operations.

The Minister indicated that the green light comes with “strict” conditions and represents a “much narrower” transaction than Glencore’s hostile takeover attempt of Teck last year. Glencore has committed to establishing and maintaining a Vancouver head office for Elk Valley Resources for at least 10 years, along with regional offices in Calgary and Sparwood, and has agreed to “maintain significant employment levels” at Elk Valley Resources for at least five years.

Teck is expected to receive $9.5 billion from the sale, excluding closing adjustments and will now turn its entire focus on providing metals that are essential to global development and the energy transition. The deal gives Teck a pathway to increase copper production by a further 30% as early as 2028.

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