The campaign to keep mining leader Teck Resources as a Canadian company now includes endorsements from politicians, industry titans and even a Canadian proposal to buy Teck\u2019s steelmaking-coal business \u2014 all to thwart a hostile takeover from world mining giant Glencore.<\/p>\n\n\n\n
For some, it’s a battle between a responsible leader within a troubled global industry and an unethical challenger with a checkered history. For others, it’s a contest between overseas interests and a Canadian economic legacy.<\/p>\n\n\n\n
Teck Resources, founded in Ontario in 1913, grew to become an international mining leader based in Vancouver, with major mining operations in BC and across Canada and even the world. The company has a long history of being recognized for award-winning sustainability efforts and social responsibility, including partnerships with Indigenous communities in some areas of operation. <\/p>\n\n\n\n
The campaign to keep Teck a Canadian company based in Vancouver began with Swiss company Glencore making a hostile takeover bid<\/a> for Teck on March 4. The proposal was worth about US$23.2 billion.<\/p>\n\n\n\n Teck turned it down.<\/p>\n\n\n\n Glencore later sweetened the offer, adding $US8.2 billion to buy the shares of Teck shareholders who might be concerned about Glencore\u2019s interests in thermal coal.<\/p>\n\n\n\n Teck said no again.<\/p>\n\n\n\n Then, Glencore said it was willing to consider further improving its offer<\/a>, but that Teck shareholders must first reject Teck\u2019s plan to separate its base metals and steelmaking-coal businesses. Teck said it would continue with a shareholder vote on the separation \u2014 but then cancelled it<\/a> just hours before it was to be held on April 26.<\/p>\n\n\n\n Raising the temperature, Glencore then said it would be willing to present its takeover offer directly to Teck shareholders, if Teck\u2019s board does not come to the negotiating table.<\/p>\n\n\n\n “We believe that with engagement, we could further improve our proposal\u2019s structure, terms and value, which would be in the best interests of all Teck shareholders,” Glencore said in a statement<\/a>.<\/p>\n\n\n\n That put new steam into Glencore\u2019s takeover bid \u2014 and there have been reports<\/a> that Glencore is only one of at least six companies interested in taking over all or part of Teck.<\/p>\n\n\n\n It all put new steam, too, into the campaign to keep Teck as a Canadian and Vancouver company.<\/p>\n\n\n\n As reported in Business in Vancouver<\/a>, “those opposing a potential takeover of a Canadian mining company by Glencore have pointed to Glencore\u2019s dubious record as a reason to reject it. Last year, the company pleaded guilty to bribery and market manipulation<\/a>, and ended up paying more than US$1 billion in fines.”<\/p>\n\n\n\n Cancelling the shareholder vote in April 26, Teck said in a news release<\/a> that it still intends to pursue the company split, defying Glencore: \u201cSeparation remains the best path to maximize value.\u201d<\/p>\n\n\n\n The CEOs of Teck and Glencore then took their battle to Spain, making competing pitches to investors<\/a> at the Bank of America\u2019s mining conference in Barcelona. And Teck CEO Jonathan Price said there that his company is \u201cworking around the clock\u201d on a new separation plan.<\/p>\n\n\n\n Earlier, he said: \u201cGlencore\u2019s rejected proposals remain a non-starter, with the same flawed structure and material execution risks identified by our board. Our plan going forward is to pursue a simpler and more direct separation, which is the best path to unlock the full value of Teck for our shareholders.\u201d<\/p>\n\n\n\n A takeover bid had been seen by market watchers as likely since Teck announced in February<\/a> that it would split the company into two independent entities: Teck Metals, to manage Teck\u2019s operations in four countries, including mining copper needed for the world energy transition, and Elk Valley Resources, to handle Teck\u2019s metallurgical (steel-making) coal operations in southeastern BC.<\/p>\n\n\n\n Though initially twice rejected by Teck, Glencore has stayed in the game. It proposed to give birth to what it calls, for now, \u201cMetalsCo\u201d and \u201cCoalCo.\u201d Each would include current proprietary operations of both Teck and Glencore. And Glencore included this special pitch to Canadians:<\/p>\n\n\n\n \u201cMetalsCo industrial head office to be located in Canada, managing approximately three times the amount Teck\u2019s current metals production. Full commitment to continue Teck\u2019s legacy in, and deliver real benefits to Canada.\u201d<\/p>\n\n\n\n It didn’t say where in Canada the head office will be; Glencore\u2019s current Canadian HQ is in Toronto.<\/p>\n\n\n\n The company said it would \u201cmaintain significant Canadian representation on each of MetalsCo\u2019s and CoalCo\u2019s board of directors; ensure that Canadians continue to serve in the management of MetalsCo\u2019s and CoalCo’s Canadian assets; provide ongoing and long-term employment in Canada for Canadians; . . . continue to invest in Canadian capital expenditure programmes in each of MetalsCo and CoalCo and make new investments in a reinvigorated exploration program in Canada; honour all of Teck\u2019s commitments to local Canadian communities as well as to Indigenous communities to ensure their interests are acknowledged and protected; and honour all of Teck\u2019s social, labour and environmental programs in Canada.\u201d<\/p>\n\n\n\n Teck is now engaging with Glencore around it’s latest proposal<\/a> to buy Teck\u2019s steel-making coal business, saying Glencore\u2019s new proposal is \u201cpreliminary in detail, conditional, and non-binding\u201d and is being evaluated along with other offers by Teck\u2019s board and an independent special committee.<\/p>\n\n\n\n At the same time, Glencore said it remains willing to pursue its offer for all of Teck, but that it has made an alternative offer for the coal operations that it would combine with its own thermal-coal assets.<\/p>\n\n\n\n These are the latest announced developments in what has been a months-long battle over the future of Canada\u2019s largest diversified mining company.<\/p>\n\n\n\n None of that held off the keep-Teck-Canadian campaign.<\/p>\n\n\n\n Pierre Lassonde, a Canadian mining entrepreneur and famous gold investor, leads a group that has offered to buy Teck’s coal assets \u2014 a move that would thwart a hostile takeover of Teck by Glencore.<\/p>\n\n\n\n Lassonde says<\/a> there are Canadians who would come together to ensure that Teck remains a Canadian enterprise. \u201cThere is no shortage of Canadian money to get the deal done.\u201d<\/p>\n\n\n\n He went on to say that he has assembled a consortium<\/a> to bid for Teck\u2019s coal business.<\/p>\n\n\n\n Resource Works founder and CEO, Stewart Muir, listed a string of reasons why keeping Teck as a Canadian and BC company is in the public interest.<\/p>\n\n\n\n A number of mining veterans also voiced support for Teck, including Robert Friedland, founder and executive chair of Ivanhoe Mines. He said in a string of tweets<\/a> that investors should not take lightly the attempted takeover of a Canadian champion.<\/p>\n\n\n\n Friedland added: \u201cLosing another quintessential Canadian support mechanism to multinationals could corporatize and hollow out our unique ecosystem that has so successfully explored our vast landmass.\u2019<\/p>\n\n\n\n Michael Goehring, CEO of the Mining Association of BC, also warned that \u201cThe potential loss of BC\u2019s long-standing mining champion and head office jobs in Vancouver is not in the best interests of British Columbians.<\/p>\n\n\n\n \u201cWe should be growing more local head office jobs in Vancouver, anchored by companies like Teck Resources, rather than see them go elsewhere.\u201d<\/p>\n\n\n\n Colin McClelland of The Northern Miner<\/em> publication wrote that Glencore faces an uphill battle<\/a> to buy Teck despite surging mergers and acquisitions in the critical minerals space. <\/p>\n\n\n\n In a time of geopolitical uncertainty, when friendly and reliable access to important industrial and energy transition metals and minerals has become crucially important, Goehring called on the federal government to review any deal as the future of a \u201cmajor Canadian critical minerals producer\u201d is on the line.<\/p>\n\n\n\n Prime Minister Trudeau said in an interview<\/a> that any takeover bid would have to get through a \u201crigorous process\u201d to win government approval. Federal Finance Minister Chrystia Freeland says Teck should remain<\/a> headquartered in Canada. Industry Minister Fran\u00e7ois-Philippe Champagne<\/a> said: “Our message has been very clear that we like Teck as a Canadian company.\u201d<\/p>\n\n\n\n And Conservative leader Pierre Poilievre, meanwhile, said he would block<\/a> a takeover by Glencore.<\/p>\n\n\n\n \u201cGlencore performs virtually no mineral exploration, creating a dead-end for Canada\u2019s resource sector. . . A Poilievre government will ensure that foreign companies who engage in despicable forms of corruption will not be given control of one of Canada\u2019s most important industries.\u201d<\/p>\n\n\n\n\n