“There is no shortage of Canadian money to get the deal done,” says Canadian investor in the latest installment in the saga to prevent overseas mining titan's takeover of Vancouver-based Teck Resources.
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’s steelmaking-coal business — all to thwart a hostile takeover from world mining giant Glencore.
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.
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.
The campaign to keep Teck a Canadian company based in Vancouver began with Swiss company Glencore making a hostile takeover bid for Teck on March 4. The proposal was worth about US$23.2 billion.
Teck turned it down.
Glencore later sweetened the offer, adding $US8.2 billion to buy the shares of Teck shareholders who might be concerned about Glencore’s interests in thermal coal.
Teck said no again.
Then, Glencore said it was willing to consider further improving its offer, but that Teck shareholders must first reject Teck’s plan to separate its base metals and steelmaking-coal businesses. Teck said it would continue with a shareholder vote on the separation — but then cancelled it just hours before it was to be held on April 26.
Raising the temperature, Glencore then said it would be willing to present its takeover offer directly to Teck shareholders, if Teck’s board does not come to the negotiating table.
"We believe that with engagement, we could further improve our proposal’s structure, terms and value, which would be in the best interests of all Teck shareholders," Glencore said in a statement.
That put new steam into Glencore’s takeover bid — and there have been reports that Glencore is only one of at least six companies interested in taking over all or part of Teck.
It all put new steam, too, into the campaign to keep Teck as a Canadian and Vancouver company.
As reported in Business in Vancouver, "those opposing a potential takeover of a Canadian mining company by Glencore have pointed to Glencore’s dubious record as a reason to reject it. Last year, the company pleaded guilty to bribery and market manipulation, and ended up paying more than US$1 billion in fines."
Cancelling the shareholder vote in April 26, Teck said in a news release that it still intends to pursue the company split, defying Glencore: “Separation remains the best path to maximize value.”
The CEOs of Teck and Glencore then took their battle to Spain, making competing pitches to investors at the Bank of America’s mining conference in Barcelona. And Teck CEO Jonathan Price said there that his company is “working around the clock” on a new separation plan.
Earlier, he said: “Glencore’s 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.”
A takeover bid had been seen by market watchers as likely since Teck announced in February that it would split the company into two independent entities: Teck Metals, to manage Teck’s operations in four countries, including mining copper needed for the world energy transition, and Elk Valley Resources, to handle Teck’s metallurgical (steel-making) coal operations in southeastern BC.
Though initially twice rejected by Teck, Glencore has stayed in the game. It proposed to give birth to what it calls, for now, “MetalsCo” and “CoalCo.” Each would include current proprietary operations of both Teck and Glencore. And Glencore included this special pitch to Canadians:
“MetalsCo industrial head office to be located in Canada, managing approximately three times the amount Teck’s current metals production. Full commitment to continue Teck’s legacy in, and deliver real benefits to Canada.”
It didn't say where in Canada the head office will be; Glencore’s current Canadian HQ is in Toronto.
The company said it would “maintain significant Canadian representation on each of MetalsCo’s and CoalCo’s board of directors; ensure that Canadians continue to serve in the management of MetalsCo’s 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’s commitments to local Canadian communities as well as to Indigenous communities to ensure their interests are acknowledged and protected; and honour all of Teck’s social, labour and environmental programs in Canada.”
Teck is now engaging with Glencore around it's latest proposal to buy Teck’s steel-making coal business, saying Glencore’s new proposal is “preliminary in detail, conditional, and non-binding” and is being evaluated along with other offers by Teck’s board and an independent special committee.
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.
These are the latest announced developments in what has been a months-long battle over the future of Canada’s largest diversified mining company.
None of that held off the keep-Teck-Canadian campaign.
Pierre Lassonde, a Canadian mining entrepreneur and famous gold investor, leads a group that has offered to buy Teck's coal assets — a move that would thwart a hostile takeover of Teck by Glencore.
Lassonde says there are Canadians who would come together to ensure that Teck remains a Canadian enterprise. “There is no shortage of Canadian money to get the deal done.”
He went on to say that he has assembled a consortium to bid for Teck’s coal business.
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.
- Teck is the flagship for Vancouver's status as a globally significant mining centre, with some of the best strategic and operational minds in the business.
- Vancouver-based Teck Resources was BC's second-largest public company in 2022, with revenues of $17 billion. By every measure – jobs, GDP, philanthropy – it has an outsized presence in the province and city.
- Teck mainstays of copper, zinc and steelmaking coal are the essence of modernity – and metals needed for energy transitions.
- The company has been a conservation champion, rehabilitating three hectares for every one hectare affected by mining operations and ranked number one worldwide for sustainability in mining and metals.
- Vancouver, without Teck Resources, would be a lesser place in every sense, and not just because of the loss of trade.
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 that investors should not take lightly the attempted takeover of a Canadian champion.
Friedland added: “Losing another quintessential Canadian support mechanism to multinationals could corporatize and hollow out our unique ecosystem that has so successfully explored our vast landmass.’
Michael Goehring, CEO of the Mining Association of BC, also warned that “The potential loss of BC’s long-standing mining champion and head office jobs in Vancouver is not in the best interests of British Columbians.
“We should be growing more local head office jobs in Vancouver, anchored by companies like Teck Resources, rather than see them go elsewhere.”
Colin McClelland of The Northern Miner publication wrote that Glencore faces an uphill battle to buy Teck despite surging mergers and acquisitions in the critical minerals space.
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 “major Canadian critical minerals producer” is on the line.
Prime Minister Trudeau said in an interview that any takeover bid would have to get through a “rigorous process” to win government approval. Federal Finance Minister Chrystia Freeland says Teck should remain headquartered in Canada. Industry Minister François-Philippe Champagne said: "Our message has been very clear that we like Teck as a Canadian company.”
And Conservative leader Pierre Poilievre, meanwhile, said he would block a takeover by Glencore.
“Glencore performs virtually no mineral exploration, creating a dead-end for Canada’s 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’s most important industries.”
The push to keep Teck Canadian also got a boost from BC Premier David Eby, who told Business in Vancouver that he, too, would ask the federal government to do what it can to prevent a takeover of Teck.
“Teck obviously is based here in British Columbia. It’s a significant source of corporate mining jobs, but also they are a big proponent of major projects across the province resulting in literally thousands of jobs for British Columbians.
“My first concern is that Glencore wouldn’t be as committed to operating mines, expanding mines and delivering on the critical minerals that we need for the climate transition.”