Teck closes sale of coal business to Glencore in wake of federal approval

VANCOUVER — Teck Resources Ltd. says it has completed the sale of its remaining 77 per cent interest in its steelmaking coal business to Glencore plc.

The news comes as no surprise following the announcement last week by the federal government that it had approved the sale of the operation to the Swiss commodities giant.

Vancouver-based Teck received US$7.3 billion from Glencore for its coal business, which it sought to off-load in order to focus more on critical minerals and the energy transition.

Glencore had initially pursued a $25-billion hostile takeover attempt for all of Teck, a move that sparked economic nationalism concerns in Canada.

Industry Minister François-Philippe Champagne said last week the green light for the sale of Teck’s coal business comes with “strict” conditions and represents a “much narrower” transaction than Glencore’s takeover attempt last year.

After receiving the thumbs-up from Ottawa, Teck said at the time that completing the transaction would give the company “a pathway to increase copper production by a further 30 per cent as early as 2028.”

“This transaction marks a new era for Teck as a company focused entirely on providing metals that are essential to global development and the energy transition,” said the company’s president and CEO Jonathan Price in a statement last week.

Teck previously closed the sale of a minority stake in the steelmaking coal business to Japan’s Nippon Steel Corp. and South Korea’s Posco.

The company has four near-term copper projects that will cost an estimated $4.7 billion to complete. It’s also working to ramp up production at its roughly US$8.7 billion Quebrada Blanca Phase 2 project in Chile.

As part of the deal, 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, B.C., Champagne said last week.

The majority of Elk Valley Resources’ directors and two-thirds of its executives or senior managers must be Canadian for the same duration.

News that Teck was exploring a sale of its coal division first broke in 2021.

This report by The Canadian Press was first published July 11, 2024.

Companies in this story: (TSX:TECK.A; TSX:TECK.B)

The Canadian Press