Teck Resources said it will separate its business into two independent, publicly-listed companies – Teck Metals Corp. and Elk Valley Resources Ltd. – in an effort to provide investors choice of businesses with unique fundamentals and value propositions.
The separation is structured as a spin-off of Teck’s steelmaking coal business by way of a distribution of Elk Valley Resources common shares to Teck shareholders. Teck Metals will retain a substantial interest in steelmaking coal cash flows through a transition period in the form of an 87.5% interest in a gross revenue royalty.
The miner expects the transaction to be completed in the second quarter of 2023.
“This transformative transaction creates two strong, sustainable, world-class mining companies committed to responsibly providing essential resources the world needs,” said Teck CEO Jonathan Price. Teck Metals will focus on premier, low-cost base metals production and a top-tier copper development portfolio, while Elk Valley Resources will be a high-margin Canadian steelmaking coal producer.
Additionally, Teck has reached an agreement with its steelmaking coal joint venture partners and major customers, Nippon Steel Corporation and POSCO, to exchange their minority interests in the Elkview and Greenhills operations for interests in Elk Valley Resources. As a result, Elk Valley will own 100% of its steelmaking coal operations.
Source: Teck Resources