Glencore takes majority stake in Canadian firm's coal business

ZURICH

Swiss commodities giant Glencore will acquire a majority stake in the steelmaking coal business of Canadian mining firm Teck Resources, the companies said yesterday, capping fraught negotiations between the groups.

Glencore said in a statement that it would take a 77-percent effective interest in Elk Valley Resources for $6.93 billion in cash.

Japan's Nippon Steel Corporation will acquire a 20-percent minority stake in Elk Valley while South Korea's POSCO will grab three percent.

Teck Resources put the value of its steelmaking coal business at $9 billion.

"We are pleased to have reached agreement to acquire Teck's steelmaking coal operations in the Elk Valley," Glencore chief executive Gary Nagle said.

Glencore, which is active in both commodity trading and mining, had unveiled a nearly $23 billion offer in early April for Teck Resources to combine their coal and metals activities, and then spin them off.

The Canadian firm twice rejected the offer, with support of its two largest shareholders.

In June, Glencore made an alternative offer to buy Elk Valley Resources.

Glencore's coal strategy has attracted fierce criticism, including from some shareholders who want it to separate coal from the rest of its activities in order to concentrate on its other resources, such as copper and cobalt, which are in high demand for the energy transition.