Teck’s coal assets partial sale seen as ‘more probable’

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Canada’s largest diversified miner Teck Resources Ltd. may announce a “simpler and more direct” plan to separate its coal assets from its metals’ unit by the end of the third quarter this year, according to an analyst at the Bank of Nova Scotia.

The Vancouver-based miner has been trying to separate its assets since February, when it announced it was going to divide itself into two publicly-listed companies to unlock shareholder value. One of the companies would focus solely on the metals needed for the energy transition, such as copper and zinc, while the other would run its steelmaking coal operations.

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But the company in April decided to come up with a new separation plan as it predicted its original proposal wasn’t going to get the required shareholder support that it needed to go ahead.

The new plan, according to Bank of Nova Scotia analyst Orest Wowkodaw, might be a partial sale of its coal assets.

“Although the probability that Teck can divest the entire (coal) business at fair value has markedly improved over the past six months, we believe this scenario remains challenged by the large size of the transaction and the limited debt capacity of the standalone business,” he said in a note to clients on Aug. 29.

“In our view, a partial sale of the business to a consortium of buyers is a more probable scenario. This structure would also likely eliminate the requirement for a shareholder vote.”

The analyst increased the level of ownership he expects Teck to sell to 70 to 100 per cent, from about 50 per cent.

Teck did not comment on Wowkodaw’s note, but referred to its previous releases that said the company has received multiple indications of interest for its coal assets.

In July, the company’s chief executive Jonathan Price said Teck was “pleased with the progress” it has made so far with respect to its separation plans.

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“We are not sitting on our hands here. We are taking a very active and diligent approach to move this forward as quickly as we can,” he said. “There is far more to it than just valuation … there is the allocation of risk and there is the long-term implication for the business beyond the transaction, all of which we have to be cognizant of.”

Teck’s initial separation plan was partially dented by mining giant Glencore PLC,

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Teck Resources says it’s still evaluating options on coal business sale

Teck Resources Ltd. is making progress in evaluating the various offers put forward by prospective buyers of its steelmaking coal business, the Vancouver-based mining company said Thursday.

On a conference call, CEO Jonathan Price declined to say whether a deal is imminent but said Teck’s board and an independent special committee are engaged with “multiple counterparties” and are progressing talks as quickly as possible.

“I don’t want to say anything now to prejudge or pre-empt what the outcome might be. We’ll take the time to get it right,” said Price, who took questions from financial analysts following the release of the company’s second-quarter earnings report.

“But we’re not sitting on our hands here. We’re taking a very active and diligent approach to moving this forward as quickly as we can.”

Teck, Canada’s largest diversified mining company, has been working to split its coal assets from its base metal operations in the hope of expanding its copper and zinc production to meet growing global demand for these metals, both of which are used in the production of electric vehicles and are considered to be key resources for the coming energy transition.

But a wrinkle was thrown into that plan this spring when Swiss commodities giant Glencore launched its $25-billion hostile takeover bid for Teck.

Rejected offer

Teck’s board rejected Glencore’s original offer. But Glencore notched a victory of its own in April when Teck called off a shareholder vote on its plan to spin off its steelmaking coal operations into a separate company. It had become apparent Teck did not have the required support for its proposal, which Glencore had lobbied against.

Glencore has since presented a new offer to Teck’s board, proposing to acquire the steelmaking portion of the company’s business for an undisclosed amount of cash.

The Swiss company has said it also remains willing to pursue its offer for all of Teck.

A journalist is silhouetted before a Teck Resources special meeting of shareholders in Vancouver, B.C., Wednesday, April 26, 2023. (THE CANADIAN PRESS/Darryl Dyck)

Price said the various parties that have expressed interest in Teck’s coal business have brought forward a “range of proposals” and added the board will only sign off on a deal that maximizes the value of the business.

“There will be a range of considerations we need to consider as we make those decisions,” he said.

“We have deliberately sought to keep a

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Former B.C. premier John Horgan joins board of coal business

Former B.C. Premier John Horgan in Ottawa on Nov. 15, 2022.Dave Chan/The Globe and Mail

Former British Columbia premier John Horgan is taking a job in the coal industry, and says he is not worried about the criticism the move may draw.

Mr. Horgan, who before becoming premier was the B.C. New Democrats’ mining and energy critic, is joining the board of Elk Valley Resources, an enterprise that is in the process of being spun off from Vancouver-based Teck Resources Ltd. The new business will focus on producing coal used to make steel.

It’s a corporate turn for Mr. Horgan. Prior to stepping down as party leader last year, he had a major national profile as one of only a few New Democrats to have headed governments recently. He was also chair of the Council of the Federation, a group of premiers and territorial leaders who were making the case for the federal government to increase health care funding.

“I’ve got other things that I am going to be working on that may be more to the taste of those who would kick up some dust, but the people that are kicking up dust, oftentimes, kick it up for the sake of kicking it up,” Mr. Horgan said in an interview.

“I don’t have a lot of time any more, none in fact, for public comment on my world view, or what I am doing with my time. I don’t want to be snippy about it, but there are others that are making policy decisions.”

Mr. Horgan, 64, was premier from 2017 until this past November. He was the first B.C. New Democrat to win two terms in the role. Former attorney-general David Eby succeeded him as provincial NDP leader and Premier.

Mr. Horgan remained an MLA until Friday, when he officially resigned his seat in the B.C. legislature. He represented a Victoria-area riding.

He conceded there may be a “knee-jerk” reaction to his move to coal, but he noted there’s a difference between coal used to make electricity and coal used for metallurgy. While there are better ways to generate electricity, he said, there are not yet better ways to make steel.

In his new role, he said, he will be making sure that the company is meeting its obligations to workers, to First Nations, to the environment and to shareholders.

After enduring treatments for cancer, Mr. Horgan,

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Indo Tambangraya (ITMG) Aims for Coal Exports to Europe in 2023

Bisnis.comJAKARTA – Listed coal producers PT Indo Tambangraya Megah Tbk. (ITMG) is targeting the coal export market to Europe in 2023.

ITMG Director of Corporate Communications and Investor Relations Yulius Gozali said that this year ITMG would still focus on targeting export in established markets such as China and Japan. ITMG also continues to look for opportunities in countries with growing economies such as Bangladesh, Vietnam and other countries.

“In addition, various European countries will also become potential markets in 2023, because they use coal as an energy option. This is because of conflict Russia-Ukraine which is still ongoing,” Yulius told Bisnis, Monday (27/2/2023).

For information, throughout 2022 ITMG was recorded to have exported US$958.7 million to several countries in Asia such as Taiwan, China, Hong Kong and Korea. Exports to this region increased by 45.83 percent compared to US$657.4 million in 2021.

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