Swiss mining and trading giant Glencore wants to purchase the coal business of Teck Resources for cash, the latest twist in one of the mining industry’s biggest takeover battles in a decade.
Under the new proposal, Glencore will buy Teck’s steelmaking coal business for an undisclosed valuation and then spin out a new company combining its own coal and Teck’s coal assets one or two years later.
That would create a coal mining behemoth with few rivals in scale anywhere in the world, producing just over 100mn tonnes of thermal coal and 30mn tonnes of steelmaking coal a year.
The proposal marks the first time that Glencore — the world’s most profitable coal mining company — has publicly outlined how it would spin out its coal business even in the absence of a full acquisition of Teck Resources, which has so far rebuffed multiple takeover offers.
Glencore had previously offered to pay up to $8.2bn in cash for Teck’s coal business as part of its broader proposal to buy all of Teck Resources in a $23bn cash-and-share deal.
Teck’s coal business, which includes four metallurgical coal mines in Canada’s British Columbia, previously had an implied valuation of just over C$11bn (US$8.2bn) as part of an investment agreement struck earlier this year with Nippon Steel, which aims to take a 10 per cent stake in the business.
Glencore made an unsolicited offer in April for the entirety of the Canadian group — including its copper and zinc mines across the Americas. Under that proposal, it planned to split the combined companies’ assets after the merger, ultimately creating a metals mining and trading business and a separately listed coal business.
Teck said it was engaging with Glencore to discuss the potential coal deal but noted Glencore’s was just “one of a number”
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