AEMA, coalition launch legal challenge to BLM Conservation and Landscape Health Rule
The American Exploration & Mining Association was joined by a coalition in filing a challenge last Friday in the Wyoming district court.
Teck Resources (TSX: TECK.A, TECK.B; NYSE: TECK) is selling its coal assets to Glencore (LON: GLEN) and two Asian steelmakers for $8.9 billion, the miner announced on Tuesday.
Under the deal, which still must be approved by regulators in Ottawa, Glencore is to pay $6.9 billion for 77% of Elk Valley Resources, Teck’s coal business, while Japan’s Nippon Steel will take 20% and Posco of South Korea gets 3%.
The steelmakers are swapping their interests in specific coal producers for stakes in the wider company. Nippon is also to pay $1.7 billion to Teck.
The deal caps negotiations that have gone on since April when Teck rejected an offer from Glencore to buy all of Canada’s largest diversified miner. It also would seal Teck’s plans to sell off its coal operations to focus on its copper and zinc business. Industry and political debate has swirled around the plans as some concerns mounted Switzerland-based Glencore was buying up Canadian resources. Others noted Glencore actually employs more Canadians than Teck.
“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 Jonathan Price said in a release.
“This sale will ensure Teck is well-capitalized and able to realize value from our base metals business and deliver strong returns to our shareholders while maintaining a robust balance sheet.”
The deal is expected to close in the third-quarter next year. Teck will keep operating the coal business until then and may earn as much as $1 billion during that time, it said.
Regulators in Ottawa must approve the foreign takeover. They would consider issues of national security and the transaction’s economic impact to determine if there is overall benefit to Canada.
The sale allows Teck to pivot to greener metals than coal, while the miner had expressed concerns about Glencore’s tarnished past with regulators that had disciplined it for alleged bribery and market manipulation. Teck expressed confidence in Glencore on Tuesday.
“Glencore has made strong commitments that will create new benefits for Canada and the Elk Valley and ensure responsible stewardship of the steelmaking coal operations for the long term,” Price said.
Norman B. Keevil, Teck’s chairman emeritus, had opposed Glencore’s plan to purchase Teck, but now backs the sale, noting it will keep jobs.
“This company was built on a foundation of sound geoscience and engineering excellence, with a record of successful mine-building second to none,” Keevil said in Tuesday’s statement. “That is the same foundation we see for Teck’s future. It’s time to get on with it.”
