Teck Resources considers Glencore offer for just the coal business in latest twist to mining saga

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Glencore has proposed buying Teck Resources’s coal business as an alternative to its $23 billion takeover bid that was rejected. Read more

The latest Glencore proposal could present a solution to some of Teck’s biggest problems. The company wants to split out its coal business but was forced back to the drawing board after canceling a shareholder vote on a spinoff in late April, when it wasn’t able to muster enough support for the plan. And Teck’s coal operations are still a key source of funding for its copper growth plans, so a cash offer for the unit could be key.

However, the coal would represent a disappointing second prize to Teck’s lucrative copper mines, which have long been seen across the industry as crown-jewel assets coveted by other large producers. In its original plan, Glencore would have transformed into one of the biggest metal miners, poised to benefit from surging demand as the global economy decarbonizes.Article content

Teck said that while it’s engaging with Glencore, there’s no guarantee a deal will be done. The Canadian miner also said it’s talking to other parties. Glencore’s previous offer valued Teck’s coal business at US$8.2 billion and it did not give a valuation for its current offer. Glencore has come under increasing pressure for its continued ownership of coal mines from its investors, with almost 30 per cent of shareholders backing a resolution urging the company to explain how its thermal coal business aligns with efforts to limit the increase in global temperatures to 1.5C.

 

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