Teck Resources, Canada's largest diversified miner, announced that it has received several "indications of interest" for its steelmaking coal business. While the company did not provide specific details, there are rumors suggesting that Teck is leaning towards selling only a portion of its coal operations.
According to Chief Executive Jonathan Price, there is widespread recognition in the market of the value held by Teck's high-margin, long-life steelmaking coal assets. This recognition has generated significant interest from various parties, although further information regarding the interested parties has not been disclosed.
Teck Resources has been facing a persistent takeover push from Glencore, prompting the company to withdraw its original proposal to split into two separate units, one for base metals and the other for coal, just hours before a shareholder meeting in April. The miner stated that it would work on a new, simpler proposal as it failed to garner enough support for the initial plan.
Teck firmly believes that divesting its coal business is a more favorable option for shareholders than being taken over by Glencore. Price emphasized that the company's focus on separation aims to unlock the full potential of its unparalleled copper growth business, creating substantial value and opportunities for shareholders and stakeholders alike.
Teck's board is actively evaluating all actionable and value-accretive proposals related to the company's coal assets. However, there is no assurance that these discussions will result in a transaction. One of the potential alternatives being explored involves a proposal put forward by Canadian mining veteran Pierre Lassonde. Lassonde, co-founder of Canada's Franco-Nevada gold royalty company, is leading a consortium that has expressed interest in acquiring Teck's coal unit.
Sources close to the matter have revealed that Lassonde's primary interest lies in Teck's Elkview operations in British Columbia. Elkview is one of Teck's four coal operations in BC's Elk Valley, with the others being Fording River, Greenhills, and Line Creek.
Sheila Murray, the chair of Teck's board, stated that the company is determined to identify a path that ensures responsible operations in the Elk Valley while supporting a sustainable future for employees, local communities, and Indigenous Peoples.
In addition to Pierre Lassonde's consortium, Japanese steelmaker Nippon Steel Corporation is also reportedly engaged in discussions with Teck regarding potential investments in the metallurgical coal business.
