Teck evaluating “several” proposals for its coal assets

Elkview is one of Teck’s four steelmaking coal operations in British Columbia. (Image: Teck)

Teck Resources (TSX: TECK.A, TECK.B)(NYSE:TECK), Canada’s largest diversified miner, announced on Tuesday it had received several “indications of interest” for its steelmaking coal business.

The company, which did not provide further details, is rumoured to be leaning toward selling only some of its coal operations.

“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,” chief executive Jonathan Price said in the statement

Teck, which continues to fend off a relentless takeover push from Glencore (LON: GLEN), had to withdraw its original proposal to split up the company into two units — base metals and coal —  just hours ahead of a shareholder meeting in April.

The Vancouver-based miner said at the time it had failed to gather enough support for the spinoff, adding it would work on a new, simpler proposal.

Teck maintains that divesting its coal business is a better option for shareholders than being taken over by Glencore. 

“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,” Price said.

The executive also said that Teck’s board continued to evaluate all “actionable, value-accretive proposals” related to the company’s coal assets. He noted there was no assurance on whether these conversations will result in a transaction.

One of the alternatives Teck may be studying is a proposal coming from Canadian mining veteran Pierre Lassonde. The businessman and philanthropist, co-founder of Canada’s Franco-Nevada gold royalty company, is leading a consortium interested in Teck’s coal unit.

Lassonde would be interested mostly in the Elkview operations in British Columbia, sources close to the matter told MINING.COM. Elkview is one of Teck’s four coal operations in BC’s Elk Valley. The other three are Fording River, Greenhills and Line Creek.

“We are 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,” the chair of Teck’s board, Sheila Murray, said on Tuesday.

Japanese steel maker Nippon Steel Corporation is also said to be engaged with Teck to invest in the metallurgical coal business.