Japan’s largest steelmaker Nippon Steel and the second largest producer of high-quality steelmaking coal in the world Canadian Teck Resources have executed an investment agreement with certain other affiliates of each of Nippon Steel and Teck, pursuant to which Nippon Steel has agreed to indirectly acquire up to 10% of common shares, preferred shares and royalty interest in Elk Valley Resources, which will be spun-off from Teck as an independent publicly-listed Canadian company and will own and operate the steelmaking coal business previously conducted by Teck . Nippon Steel and Elk Valley Resources have agreed that concurrently with the completion of the Investment, they will enter into long-term coal offtake rights agreement, under which Elk Valley Resources will supply steelmaking coal to Nippon Steel.Name - Elk Valley ResourcesHead Office - Vancouver, British Columbia, CANADADescription of Business - Production and sales of steelmaking coalMajor coal mines - Fording River, Elkview, Greenhills, Line CreekAnnual production capacity - 25-27 million tonnesNippon Steel is striving to achieve carbon neutrality by multi-track challenging technological developments. To reduce CO2 emissions while securing stable and efficient iron production, the use of high-quality steelmaking coal is essential. In order to address a concern that steelmaking coal production capacity may shrink in the future, since capital investment for fossil fuels, including coal, has been decreasing in a trend of pursuing carbon neutrality, Nippon Steel has decided to increase its investment in high-quality steelmaking coal, which is essential in pursuing its own carbon neutral strategy.As part of the Separation, Teck Resources will change its name to Teck Metals Corp. Teck Metals will retain a substantial interest in steelmaking coal cash flows through a transition period in the form of an 87.5% interest in a gross revenue royalty and preferred shares of Elk Valley Resources. Under the Transition Capital Structure, Teck Metals will receive quarterly payments consisting of Royalty payments and preferred share redemption amounts that will in aggregate equal 90% of Elk Valley Resources free cash flow.
Japan’s largest steelmaker Nippon Steel and the second largest producer of high-quality steelmaking coal in the world Canadian Teck Resources have executed an investment agreement with certain other affiliates of each of Nippon Steel and Teck, pursuant to which Nippon Steel has agreed to indirectly acquire up to 10% of common shares, preferred shares and royalty interest in Elk Valley Resources, which will be spun-off from Teck as an independent publicly-listed Canadian company and will own and operate the steelmaking coal business previously conducted by Teck . Nippon Steel and Elk Valley Resources have agreed that concurrently with the completion of the Investment, they will enter into long-term coal offtake rights agreement, under which Elk Valley Resources will supply steelmaking coal to Nippon Steel.Name - Elk Valley ResourcesHead Office - Vancouver, British Columbia, CANADADescription of Business - Production and sales of steelmaking coalMajor coal mines - Fording River, Elkview, Greenhills, Line CreekAnnual production capacity - 25-27 million tonnesNippon Steel is striving to achieve carbon neutrality by multi-track challenging technological developments. To reduce CO2 emissions while securing stable and efficient iron production, the use of high-quality steelmaking coal is essential. In order to address a concern that steelmaking coal production capacity may shrink in the future, since capital investment for fossil fuels, including coal, has been decreasing in a trend of pursuing carbon neutrality, Nippon Steel has decided to increase its investment in high-quality steelmaking coal, which is essential in pursuing its own carbon neutral strategy.As part of the Separation, Teck Resources will change its name to Teck Metals Corp. Teck Metals will retain a substantial interest in steelmaking coal cash flows through a transition period in the form of an 87.5% interest in a gross revenue royalty and preferred shares of Elk Valley Resources. Under the Transition Capital Structure, Teck Metals will receive quarterly payments consisting of Royalty payments and preferred share redemption amounts that will in aggregate equal 90% of Elk Valley Resources free cash flow.
