After a plan to spin off the steelmaking coal business to a separate corporate entity failed to gain traction among shareholders, Teck Resources says there remains market interest for various forms of potential transactions.
In a statement issued Tuesday (June 6), the company reiterated its intent of separating the base metals and steelmaking coal businesses, noting that it will continue to consider all proposals relating to the metallurgical operations to determine if it’s in the best interest of shareholders and other stakeholders.
“We are also resolved to identify a path that ensures continued responsible operations in the Elk Valley and supports a sustainable future for the benefit of employees, local communities and Indigenous peoples,” said board chair Sheila Murray.
The Vancouver-based mining giant had announced a plan to separate and spin off the coal business into Elk Valley Resources, but Teck withdrew that proposal ahead of a scheduled vote by shareholders on April 26.
That vote followed weeks of public discourse through a proposed merger with Glencore, which made an offer that included $8.2 billion cash offer to shareholders, as well as a 24 per cent stake in a metals company that would be formed if the bid was successful.
However, the Glencore proposal attracted widespread opposition, including from local, regional and federal elected officials concerned about the economic impacts of the business transitioning to foreign ownership.
As for now, Teck says it continues to listen to all offers.
“There is widespread recognition in the market today of the value of our high-margin, long-life steelmaking coal assets, which has, in turn, generated considerable interest from various parties,” said Jonathan Price, CEO. “Our focus on separation is to unlock the full potential of our unparalleled copper growth business and create significant value and opportunity for our shareholders and all stakeholders.”
Currently, Teck Coal Ltd. operates four metallurgical coal mines in the Elk Valley, which directly and indirectly employ thousands of people in the region.
In 2022, Teck Coal pulled 21.5-million tonnes from the Elk Valley coal operations, with the majority of sales to the Asia-Pacific region. Gross profits from the coal business reached $6.4 billion, a significant increase from $2.8 billion in 2021.
However, water quality from selenium contamination has been a long-running concern by local residents and environmental advocates.
The company has invested over $1 billion into water quality treatment efforts and have constructed capacity to treat up to 77.5 million litres of water per day.
Teck was fined $60 million in 2021, the largest environmental penalty ever levied under the federal fisheries act, after pleading guilty to two counts of contaminating fish-bearing waterways.
This year the company was also fined over $16 million by the B.C. government for exceeding selenium levels in various daily and monthly reporting periods, and for failing to have a water treatment facility operating by a December 2018 deadline.