• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 4 hours CHINA Economy Disaster - Employee Shortages, Retirement Age, Birth Rate & Ageing Population
  • 6 days Wasting money down under
  • 3 hours If hydrogen is the answer, you're asking the wrong question
  • 23 hours Natural gas mobility for heavy duty trucks
  • 1 day Ocean Heat Could Supply Endless Clean Energy
  • 6 days Energy and food crisis will lead to riots in Europe
  • 8 days How Far Have We Really Gotten With Alternative Energy

Glencore Buys Teck Resources’ Coal Business

Glencore has struck a deal to acquire the coal operations of Teck Resources in a $9-billion transaction also involving two other companies.

Earlier this year, Glencore offered to acquire the whole company but Teck shareholders rebuffed the offer that valued the company at $22.5 billion. Per the proposal, the merged entity would be split into two, one focusing on coal and the other on metals.

Instead, the Canadian miner opted to restructure its business, separating its copper and zinc operations from its coal operations.

A few hours after the Wall Street Journal, the Globe and Mail reported that the deal being discussed also involved Nippon Steel and South Korea’s POSCO. Per that report, which also cited unnamed sources, the three would buy the majority of Teck’s coal business, paying a combined $8.9 billion.

Of this total, Glencore would pay $6.9 billion and receive in exchange a 77% stake in the coal business. Japan’s Nippon Steel, for its part, would swap its current stake in a Teck coal project for a 20% stake in the coal operations, paying an additional $1.7 billion. POSCO would also swap its stakes in two Teck coal projects for a 3% stake in the coal business of the company.

The FT later confirmed this information as it reported on the acquisition deal.

The development suggests that despite the massive pressure on companies operating in the coal space, interest in the commodity remains, as does demand. The deal negotiations come ahead of COP28, where coal will be discussed at length, judging by a recent intensification of calls to phase out the most polluting hydrocarbon.

As a result of that growing pressure, most commodity traders have shrunk their coal operations but Glencore has bucked that trend. The Swiss major has remained active in coal although it has announced plans to wind down that business by 2050 in case its shareholders want that.


By Charles Kennedy for Oilprice.com

More Top Reads From Oilprice.com:

Join the discussion | Back to homepage

Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News