By Clara Denina
LONDON (Reuters) -Glencore sealed a deal for a 77% stake in Canadian miner Teck Resources’ steelmaking coal business for $6.93 billion in cash, the companies said on Tuesday, paving the way for a spin-off of the commodity giant’s own coal business.
Teck will also sell 20% of the business to Japan’s Nippon Steel Corporation, which already holds a 2.5% stake in it.
South Korea’s POSCO will swap a stake in two of Teck’s coal operations for 3% in the steelmaking coal business Elk Valley Resources (EVR).
The transaction is expected to close in the third quarter of 2024.
Teck Resources had to rework a plan to split coal from its copper and zinc unit that failed to secure sufficient shareholder support in April after Glencore unsuccessfully offered to buy the whole company.
“This is a very different transaction…we’ve spent the months between then and now engaging with a whole range of counterparties and it’s important that we took that time to deliver the best outcome,” Teck CEO Jonathan Price told Reuters on a call.
Glencore, which mines and trades thermal coal used to produce electricity as well as smaller amounts of coking coal to make steel, said it would demerge the coal units of both companies within 24 months of the deal’s close.
The merged coal company will eventually be listed in New York, with secondary listings in Toronto and Johannesburg, Glencore CEO Gary Nagle told reporters.
The head office for the steelmaking coal business will be set up in Vancouver, they said.
(Reporting by Clara Denina and Yadarisa Shabong; editing by David Goodman and Jason Neely)
