Glencore will take over Teck’s Elk Valley Resources, but must adhere to several conditions, outlined by Industry Minister Francois-Philippe Champagne.
“Today I approved under strict conditions a much narrower transaction whereby Glencore will acquire Teck Resources’ metallurgical coal business,” Champagne stated.
The company has agreed to Elk Valley Resources’ Canadian headquarters for at least a decade, ensure a majority of directors are Canadian and preserve significant employment levels at Elk Valley Resources for a minimum of five years.
The deal, which is expected to close by July 11, marks a significant shift in Teck’s strategic focus wholly towards critical metals essential for the energy transition, such as copper.
The company also intends to distribute approximately US$182 million to shareholders through a special dividend in September.
Following the announcement, Teck’s shares saw significant gains, rising over 5 percent intraday.
The proceeds will also support Teck’s expansion at its Highland Valley copper mine in Canada, as well as projects in Mexico, Peru, and the major extension of its Quebrada Blanca mine in Chile, expected to double the company’s copper production.
The estimated capital cost for these projects ranges between US$3.3 billion and US$3.6 billion, with a projected 30 percent increase in copper production by 2028. The proceeds will also be used for funding near-term growth in its copper projects.
“This transaction will be a catalyst to re-focus Teck as a Canadian-based critical minerals champion with an extensive portfolio of copper growth projects, unlocking the full value potential of the company,” Teck President and CEO Jonathon Price said in the statement.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
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