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Teck Resources (New York Stock Exchange:TECK) +2.4% on Friday pre-market trading after the Canadian government approved Glencore’s (OTCPK:GLCNF) (OTCPK:GLNCY) acquisition of a 77% stake in Teck’s metallurgical coal business for $6.9 billion.
Industry Minister Francois-Philippe Champagne said Glencore (OTCPK:GLCNF) (OTCPK:GLNCY) has agreed to several conditions to protect local jobs. and maintain executive offices in Western Canada, ensuring that the majority of the directors of the coal business are Canadian and honouring Teck’s commitments (TECHNIQUES) has done to indigenous communities.
Glencore (OTCPK:GLCNF) (OTCPK:GLNCY) has made binding environmental commitments, the minister said, including assuming stewardship responsibility until 2050 — even if it sells or disposes of the asset — and spending an additional C$350 million on rehabilitation and closure activities over five years.
Champagne also said Teck (TECK) has committed to investing a significant amount of the sale proceeds into its copper assets, “which will position Teck for leadership in the critical minerals space.”
The minister raised the bar for approval of future foreign deals involving large Canadian mining companies engaged in critical mineral operations, saying such acquisitions would be granted only in “the most exceptional circumstances.”
Separately, Teck (TECK) said its second-quarter steelmaking coal sales totaled 6.4 million metric tons, at the high end of the company’s guidance of 6 to 6.4 million tons, at an average realized price of $237/ton.