Glencore is set to acquire a 77 per cent stake in Teck Resources’ steelmaking coal subsidiary Elk Valley Resources (EVR) in a US$6.93 billion ($10.6 billion) cash deal.
“We are pleased to have reached agreement to acquire Teck’s steelmaking coal operations in the Elk Valley,” Glencore chief executive officer Gary Nagle said.
“These world-class assets and the experienced people that operate them are expected to meaningfully complement our existing thermal and steelmaking coal production located in Australia, Colombia and South Africa.”
Concurrently, Teck has agreed with Nippon Steel Corporation (NSC) will acquire additional equity in EVR from Teck to hold a 20 per cent equity interest in EVR.
Steelmaking company POSCO advised Teck it intends to exchange its current 2.5 per cent interest in Elkview Operations and its 20 per cent interest in the Greenhills joint venture in British Columbia, for a three per cent interest in EVR.
At closing, Glencore will also acquire from Teck, NSC and POSCO’s attributable share of a shareholder loan from Teck to EVR which is repayable out of EVR’s cash flows.
“Glencore has high regard for the business that has been developed over many decades in British Columbia and looks forward to maintaining and enhancing its operational performance, environmental stewardship and social contribution,” Nagle said.
“We are dedicated to working with all governing bodies and stakeholders to ensure that the transaction is of benefit to Canada, which includes a commitment from Glencore regarding employment, engaging in further reclamation efforts and to engage constructively and meaningfully with the Indigenous Nations in the Elk Valley.
“This transaction also deepens our longstanding commitment to Canada, supporting our position as one of the largest diversified miners and suppliers of critical minerals in Canada, in one of the world’s leading mining jurisdictions.
“We have a longstanding relationship with NSC and POSCO and we look forward to working closely with them as our future partners in EVR.”
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