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Teck Resources (NYSE:TECK) +2.4% pre-market Friday after Canada’s government approved Glencore’s (OTCPK:GLCNF) (OTCPK:GLNCY) US$6.9B acquisition of a 77% stake in Teck’s metallurgical coal business.
Industry Minister Francois-Philippe Champagne said Glencore (OTCPK:GLCNF) (OTCPK:GLNCY) accepted several conditions to protect local jobs and keep executive offices in western Canada, ensuring a majority of directors of the coal business are Canadian, and honoring commitments Teck (TECK) has made to indigenous communities.
Glencore (OTCPK:GLCNF) (OTCPK:GLNCY) made binding environmental commitments, the minister said, including taking responsibility for stewardship through to 2050 – even if it sells or disposes of the asset – and spending an additional C$350M in rehabilitation and closure activities over five years.
Champagne also said Teck (TECK) committed to invest a significant amount of the sale’s proceeds into its copper assets, “which will position Teck for leadership in the pivotal area of critical minerals.”
The minister raised the bar for approval of any future foreign deals involving large Canadian mining companies engaged in significant critical minerals operations, saying any such acquisitions would be granted only in “the most exceptional of circumstances.”
Separately, Teck (TECK) said its Q2 steelmaking coal sales totaled 6.4M metric tons, at the top end of company guidance of 6M-6.4M tons, at an average realized price of US$237/ton.