Glencore buys $6.9bn stake in Teck's Elk Valley Resources

Mining and commodities giant Glencore is spending $6.9bn to buy a 77% stake in Teck Resources' steelmaking coal business in Canada's Rocky Mountains, Elk Valley Resources (EVR).

In a separate deal, Teck is also selling a 20% stake in EVR to Nippon Steel Corporation and a 3% stake to POSCO.

EVR, located between British Columbia and Alberta, produced 21.5m tonnes of steelmaking coal in 2022, generated a pre-tax profit of C$6bn (£3.5bn). Gross assets were valued at C$18.5bn (£10.9bn) by September 2023.

Glencore said it still intends to demerge its coal and carbon steel materials businesses into a standalone company, which will now include its stake in EVR.

The new business "would be well positioned as a leading, highly cash-generative bulk commodity company, likely attracting strong investor demand given such yield potential", it said.

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

"These world-class assets and the experienced people that operate them are expected to meaningfully complement our existing thermal and steelmaking coal production located in Australia, Colombia and South Africa."