Tag Archives: Elk Valley

Elkview

Teck to exit steelmaking coal business with Glencore, Nippon Steel deals

Coal technology, Mining mergers and acquisitions, Steel and iron ore, , , , , , , , ,

Teck Resources has agreed to sell its entire interest in its steelmaking coal business, Elk Valley Resources (EVR), through a sale of a majority stake to Glencore for an implied enterprise value of $9.0 billion, and a sale of a minority stake to Nippon Steel Corporation (NSC).

The sale of Teck’s steelmaking coal business at the implied enterprise value of $9 billion on a 100% basis achieves a simple and complete separation of steelmaking coal from base metals.

Glencore has agreed to acquire 77% of EVR for $6.9 billion in cash, payable to Teck at closing of the Glencore transaction, subject to customary closing adjustments.

NSC has agreed to acquire a 20% interest in EVR in exchange for its current 2.5% interest in Elkview Operations plus $1.3 billion in cash payable to Teck at closing of the NSC transaction and $400 million paid out of cash flows from EVR. NSC will also enter into a long-term steelmaking coal offtake rights arrangement at market terms, continuing NSC’s long-standing commercial arrangement for the purchase of steelmaking coal from the Elk Valley.

POSCO has advised Teck it intends to exchange its current 2.5% interest in Elkview Operations and its 20% interest in the Greenhills joint venture, for a 3% interest in EVR. At closing of the Glencore transaction, Glencore will acquire from Teck any remaining receivable payable to Teck by EVR.

Teck will continue to operate the steelmaking coal business and will retain all cash flows from EVR until closing of the Glencore transaction, estimated to be $1 billion. Following the closing of that transaction, Teck will have no further financial interest in EVR.

Key historical information on EVR, as reported by Teck, is outlined below:

  • Production of steelmaking coal of 21.5 Mt in 2022 and 17.3 Mt year to date to September 30, 2023;
  • EBITDA of C$7.4 billion ($5.4 billion) in 2022 and C$3.7 billion year to date to September 30, 2023;
  • Profit before tax of C$6 billion in 2022 and C$3.1 billion year to date to September 30, 2023; and
  • Gross assets as at September 30, 2023 of C$18.5 billion.

Jonathan Price, President and CEO, Teck, said: “This transaction will be a catalyst to re-focus Teck as a Canadian-based critical minerals champion with an extensive portfolio of copper growth projects, unlocking the full value potential of the company. This sale will ensure Teck is well-capitalised and able to realise value from our base metals business and deliver strong returns to our shareholders while maintaining a robust balance sheet. Glencore has made strong commitments that will create new benefits for Canada and the Elk Valley and ensure responsible stewardship of the steelmaking coal operations for the long term.”

Gary Nagle, CEO of Glencore, said: “We are pleased to have reached agreement to acquire Teck’s steelmaking coal operations in the Elk Valley. 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. Glencore has high regard for the business that has been developed over many decades in British Columbia and looks forward to maintaining and enhancing its operational performance, environmental stewardship and social contribution.

“We are dedicated to working with all governing bodies and stakeholders to ensure that the transaction is of benefit to Canada, which includes a commitment from Glencore regarding employment, engaging in further reclamation efforts and to engage constructively and meaningfully with the Indigenous Nations in the Elk Valley. This transaction also deepens our longstanding commitment to Canada, supporting our position as one of the largest diversified miners and suppliers of critical minerals in Canada, in one of the world’s leading mining jurisdictions.”

Closing of the Glencore transaction is subject to customary conditions, including receipt of approvals under the Investment Canada Act and competition approvals in several jurisdictions, and is expected to occur in the third quarter of 2024. The NSC transaction is also subject to customary conditions, including receipt of certain competition approvals, and is expected to close in the first quarter of 2024. These transactions are not inter-conditional.

Teck goes for RCT teleremote solution at Coal Mountain in British Columbia

Automation, Communications in mining, Mining equipment, Mining safety, Mining services, Mining software, Steel and iron ore, , , , , , , ,

RCT’s ControlMaster® Teleremote solution has been selected by Canada’s largest diversified mining company, Teck Resources, for use at one of its steelmaking coal operations in British Columbia’s Elk Valley region.

The ControlMaster Teleremote solutions were installed on a Cat D11T dozer and a Cat 390D hydraulic excavator, operating at the open-pit steelmaking coal truck and shovel operation at Teck’s Coal Mountain Operations.

The technology supports safe production at the operation, as equipment can be operated remotely in areas that are deemed unsafe for human operators, RCT says. The solutions also help increase productivity and profitability on site.

RCT, which recently announced a broadening of its automation offering, integrated a communication network into the Teck’s existing wireless network to facilitate the remote functions of the machines. In addition, the RCT Custom department played a part in the project as it was the first excavator of this model the company has completed an install on.

RCT’s VP of Business Development for Canada, Vern Deveau, said the solution provided to Teck met the client’s requirements and operators were impressed with the custom teleremote solutions.

In addition, RCT’s solutions “effortlessly connected” to Coal Mountain’s network infrastructure, making the remote features seamless, he said.

The project and training were delivered ahead of schedule with positive feedback received from Teck staff on site, RCT added. Customer support will be provided locally by RCT’s Ontario branch, which will carry out servicing and any support required by Teck going forward.

RCT says Teck is also assessing the viability of implementing the same technology at other operations.

Teck’s Coal Mountain Operations produces metallurgical coal, which it exports by sea to the Asia-Pacific region and elsewhere. The current annual production capacities of the mine and preparation plant are approximately 2.7-3.5 Mt of clean coal, respectively, Teck says.